Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Mental Health) Share this | Link to this | Hansard source

Without going to specific amendments, I want to speak in generalities to start with. At the outset, I want to restate Labor's strong and absolute support for health and medical research in our country and for the establishment of a Medical Research Future Fund. But there are a number of issues in the bills that I outlined in my contribution on the second reading, when I outlined the concerns that Labor has had with these bills. I indicated in my speech on the second reading that Labor will be moving amendments. Those amendments were circulated a long time ago. At the first opportunity we had to circulate those amendments, we did, because Labor is interested in transparency. During Senator Di Natale's speech, he said that the Greens will vote for good ideas. I invite the Greens to have a look at the substance of our amendments and I invite them to be good to their word.

In my speech on the second reading, I used the word 'messy' and said that this had been a messy process, that the gestation of these bills had been long and that the birth was going to be short and sharp. Well, it just got messier. We turn up today and we have another supplementary explanatory memorandum—tabled today

We have 21 more amendments that were tabled at 9.30 this morning. They are complex amendments. We will go through the substance of those amendments.

I talked about chaos and dysfunction in my second reading speech. Well, it has a 'C' and a 'D' as of this morning. As we know, the first bill had 20 amendments in the House of Representatives. They were passed in that place and we then got the bill and the consequential amendments bill. We had an inquiry just last Thursday. Who is running the show here? Just last Thursday we had an inquiry and then we had the bill appearing on the Notice Paper on Monday morning. The report of that inquiry said:

The committee recommends the bills be passed.

It did not recommend that we need 21 more amendments, that we need another explanatory memorandum. It said that the bill be passed. This committee report here is the vehicle by which a government will review and rethink their policy position. They did not use it. Who is running this show?

Government members in their second reading contributions talked about urgency. They warned that delay in the Senate would affect the potential for medical research somewhere down the track. Well, can I say that the only delay that is happening with these bills is happening because of the government. We are very happy to deal with this legislation—we have been happy for quite some time. We are very happy to actually negotiate with the government. But they have done a little deal with the Greens. The alternative government have ideas and opportunities to contribute to improve these bills, but, from the minister's comments, it would seem now that they are not going to be considered. They have the numbers from the Greens, that will do—'We are not going to think about the way we can improve this bill.'

Senator Sinodinos is a person for whom I have a lot of regard. He said that this was a historic bill, that this was monumental, that this would become the largest medical research fund in the world. If we are doing something that is so important, if we are doing something that is going to be so significant, why couldn't they get the drafting organised and not bring in amendments at 9.30 this morning on something that is their signature policy?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

You have never done that!

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Mental Health) Share this | Link to this | Hansard source

At 9.30 this morning for something that is so significant, that is so important, that is your signature policy that you only told the Department of Health about two weeks before the budget, by the way—but that is another matter; why is this such a mess?

You would think that for something that is so significant and so important that someone would have done the work needed. Well, Minister Cormann, it has not happened. Whether it is the Department of Finance, whether it is the Department of Health, someone has not done the proper consultation work that has been needed to be done. It is obvious now to everyone that that work has not been completed.

The Labor Party, in good faith, have drafted a number of amendments and the purpose of those amendments is to strengthen the role of the advisory board so that decisions cannot simply be made on the whim of the minister of the day, potentially based on whoever has had his or her ear at the time or to fund pet projects that are potentially of a political nature. Medical research dollars are hard to find; they are hotly contested.

As many have described, and I did in my own speech, we can be extremely proud of Australia's contribution to medical research in the world. We can be, but let us use those dollars very wisely. That is why most of the submitters—I think all—talked to our committee about some sort of peer review. We have to make sure we apply our funds in the most efficient and the most effective way. That does not discount the comment that Senator Xenophon made. There are good cases and they can be made for providing funds to diseases or medical events that relate to small cohorts of the population. You can make that argument. It has been done in the past and it should be done.

We need to make sure that the money that is applied to medical research in our country is given to the right projects so that we will get the best outcomes. In fact, it was Senator O'Sullivan's contribution this morning that actually makes my case right. Senator O'Sullivan talked about the value of—I am not sure how to pronounce the word; it is the cannabis oils.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Cannabinoids.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Mental Health) Share this | Link to this | Hansard source

Thank you very much. He talked about how valuable they are, and that is a good thing. We should have that discussion; we should have that argument. He then made the point that the MRFF would give certainty to the research into the use of cannabinoids. We now have a politician standing up in this place saying that we have to have this fund, that it is going to give us a billion a year and that research into cannabis related products will have certainty. A politician has made that point. That is my point: we have to remove the political process from decisions about where health and medical research funds are applied. We cannot leave it to politicians. We cannot leave it to a public campaign about a terrible, horrible, difficult circumstance that affects a group of people and the research program being elevated because of the political or media attention rather than the veracity of the application. That is why Labor will be moving these amendments.

Our amendments also go to preserving the health and hospital fund as an independent fund. Labor established the Health and Hospitals Fund. It has delivered marvellous facilities around the country, and I will go to those issues when I get to move those amendments. Labor's amendments also unmanned the bill so that the health minister will make decisions about the financial assistance that is provided from the medical research Future Fund special account following recommendations by the Australian medical research advisory board and taking into account the Australian medical research and innovation priorities rather than the minister simply taking into account the advisory boards recommendations in making any funding decision. That is the substance of the amendments that we have made. I look forward to hearing the argument against them.

Let me also go to Senator Lambie's question that Minister Cormann has answered—you have, Senator Cormann, answered it technically, but I would like you to list for Senator Lambie so that she is very clear about what the measures are that have passed and not passed; and also those measures that do not need to come before the parliament and that the moneys have been identified as going to the Medical Research Future Fund. Because, Senator Cormann, not all of the measures that have been identified to fund the MRFF do have to pass the parliament. I will ask you in detail for the list of those at some stage.

To conclude, I remind the chamber that Labor absolutely supports and has shown by our deed the investment in medical and health research in our country, but this mechanism has been messy. This process has been untidy at worst, and we are trying to do our bit to improve it. I encourage the minister to reconsider his lack of support for our amendments.

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

Just very briefly: we certainly acknowledge the concerns expressed by Senator McLucas. We understand that the issue of the independence of the fund is paramount and we have in our negotiations—both through the Senate committee process and subsequently—sought to ensure that the appointment process was an independent process. We have been given some comfort in the fact that the NHMRC CEO is represented on the advisory panel.

We also believe that the nature of the panel is such that, when it comes to selecting pre-eminent medical researchers from organisations across the nation, the professional reputation of those individuals is in itself something that will guarantee a degree of independence. Of course, within that, there needs to be some flexibility for the government of the day to be able to, if necessary, in urgent situations direct the fund's research priorities. Obviously, one of the things where that may be an issue is in the case of something like an infectious diseases outbreak where having the capacity to be able to direct research efforts quickly in a particular direction is important.

While we acknowledge the concerns from Senator McLucas, and I think they are valid concerns, the measures that have been put in place through the amendments developed with the government will satisfy us that decisions will be made independently and in the best interests of what the fund is intended to do—that is effectively administer public funds to medical research priorities in a way that is different from the NHMRC—a very different focus; the NHMRC does much foundational research. However, the big gap that exists is within the translational pathway, and that is one of the reasons that this fund has been established.

The Greens are and always have been very, very strong supporters of medical research. We were disappointed that the genesis of this fund appeared to be a very unpopular budget measure: the establishment of the Medicare co-payment. But, what has been salvaged from that mess is, I think, a fund that will ensure that the huge gap that exists in the translational pathway when it comes to the medical research pipeline is addressed. It is for those reasons that we will support this legislation.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Mental Health) Share this | Link to this | Hansard source

by leave—I move opposition amendments (1), (4), (5), (6), (9), (11), (12) and (19) on sheet 7711.

(1) Clause 4, page 3 (lines 18 to 22), omit "Initially, the Fund's investments are a portion of the investments of the Health and Hospitals Fund which was established under the Nation-building Funds Act 2008. Additional amounts may also be credited to the Medical Research Future Fund Special Account", substitute "Amounts are credited to the Medical Research Future Fund Special Account in accordance with determinations by the responsible Ministers".

(4) Clause 5, page 6 (lines 3 to 5), omit the definition of Health and Hospitals Fund.

(5) Clause 5, page 6 (lines 6 to 9), omit the definition of Health and Hospitals Fund Special Account.

(6) Clause 10, page 12 (lines 6 to 10), omit "Initially, its investments are a portion of the investments of the Health and Hospitals Fund which was established under the Nation-building Funds Act 2008. Additional amounts may also be credited to the Medical Research Future Fund Special Account", substitute "Amounts are credited to the Medical Research Future Fund Special Account in accordance with determinations by the responsible Ministers".

(9) Clause 15, page 16 (line 23), omit "amounts referred to in paragraph 34(4)(a) are", substitute "amount referred to in paragraph 34(4)(a) is".

(11) Clause 19, page 20 (line 21), omit "Agency; or", substitute "Agency."

(12) Clause 19, page 20 (lines 22 to 24), omit subparagraph (iii).

(19) Clause 34, page 36 (lines 15 to 20), omit paragraph (4)(a), substitute:

  (a) the principle that the total amount (in nominal terms) that has been credited to the Medical Research Future Fund Special Account under section 15 should be preserved over the long-term;

These issues go to the Health and Hospitals Fund. Labor does not support the abolition of the Health and Hospitals Fund and its remaining funds—somewhere in the order of $1 billion—being rolled into the Medical Research Future Fund.

I particularly want to make mention of some of the projects that have been delivered through the Health and Hospitals Fund and the positive impact that that fund has had on the health and wellbeing of Australian people. In particular, I want to acknowledge the 24 regional cancer centres delivered across three rounds of the fund, including in areas where, up to the time of their opening, patients had had to travel many, many hundreds and sometimes thousands of kilometres to receive the best quality treatment for cancer. I refer in this regard to the services constructed in my city of Cairns, Townsville, Traralgon, Ballarat, Bunbury, and Whyalla in South Australia. The Health and Hospitals Fund also contributed to countless other projects of significant value to communities across the country, including through the Garvan St Vincent's cancer centre in Sydney, the Nepean Clinical School, the Melbourne Neuroscience Institute project, the new rehabilitation unit at the Fiona Stanley Hospital in Perth, the Midland Health Campus also in Perth, the acute medical and surgical service unit in Launceston and the research and training facility at the Menzies School of Health Research in Darwin.

I also want to comment on Senator Sean Edwards's commentary in his second reading debate where he spoke glowingly about the SAHMRI, the cheese grater, in South Australia. He talked about how proud he was to attend with Prime Minister Abbott the opening of that facility a couple of years ago. It must have been early in the time of the new government—that was funded through the Health and Hospitals Fund. That was a project that has been delivered by the Health and Hospitals Fund in its current iteration, in its current structure. If our amendments are not carried today, those moneys, that billion dollars that is still left in the fund, will then move across into the research fund. As I said, Labor supports research funding. I think it was Senator Xenophon who said, 'I hope we are not robbing Peter to pay Paul.' Well, Senator Xenophon, I think we are. And, to answer that question, we are. We are taking money from, in this case, the Health and Hospitals Fund and from a myriad of other programs as well. I certainly will come back to the minister with that list. I hope that it is being worked on.

I have moved those amendments. I remind this chamber, though, that the Prime Minister promised, before the last election, that there would be no cuts to health. In opposing the abolition of the Health and Hospitals Fund, Labor is, at least, holding this government to account on this program.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Let me just answer that final comment first. Yes, the government did make a commitment in the lead-up to the last election that there would not be any cuts to health in the period of the budget forward estimates from the time of the last election, and indeed there will not be. What we are doing is reprioritising some of the expenditure inside the Health portfolio. Something that Labor never understood in government and clearly still do not understand in opposition is that there is no magic pudding. If you want to spend more money on a higher priority, you have to spend less money on a comparatively lower priority in the circumstances. That is exactly what we are doing in this circumstance, so in the same way that the Health and Hospitals Fund initiated by the previous government replaced an initiative of the previous government before that—the Howard government—we have made judgements in all of the circumstances about what the best and most appropriate priorities in the Health portfolio should be moving forward. That is why we have decided that, as part of boosting investment in medical research, we would transfer about $1 billion in uncommitted funds from the Health and Hospitals Fund to the Medical Research Future Fund. The Health and Hospitals Fund moneys are uncommitted, so they are not currently being used for health purposes. The Health and Hospitals Fund was always intended to be a time-limited fund—that is, it was always intended by the previous government to be a time-limited fund—which would eventually be exhausted, unlike the Medical Research Future Fund, which will exist in perpetuity and will deliver health benefits to the Australian community in perpetuity. The Medical Research Future Fund allows the balance of these funds to be used for health purposes that are both wider and more strategic than the Health and Hospitals Fund allowed. This redirection will be more beneficial to long-term improvements in public health than leaving the funding in the very narrowly focused and dormant Health and Hospitals Fund. The early injection of these funds is very important to ensuring that the Medical Research Future Fund is scaled up quickly and makes the strongest contribution possible to medical research and innovation as early as possible. With this money, Australia will be well advanced towards building what should prove to be the largest sovereign medical research fund in the world, but without this seed capital the timing and scale of that ambition would be set back. For those reasons, the government does not support these amendments.

Penny Wright (SA, Australian Greens) Share this | Link to this | Hansard source

The Australian Greens have heard Senator McLucas's points in relation to the amendments. However, we acknowledge that there are currently significant funds in the Health and Hospitals Fund but that money is not currently being spent. It has not been allocated to hospitals. We have heard from the government that they do not have an intention to allocate that money to hospitals, so the Australian Greens take the view that it is sensible to have those funds, rather than sitting there, doing good investing in the research that we all agree is desirable for Australia and for the future. We understand that it is actually necessary for the clauses that the Labor Party is seeking to amend to be in the current bill to allow the funds to capitalise the Medical Research Future Fund. For that reason, the Australian Greens will not be supporting Labor's amendments.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Mental Health) Share this | Link to this | Hansard source

Minister, it is at this point that I would like you to list all of the measures that were identified in the 2014-15 budget. My recollection is that in the 2015-16 budget nothing was identified—but please correct me if I am wrong. At this point—and it is a question that I have asked at estimates so I am sure you have that at hand—in order to assist Senator Lambie and also for the chamber, I am seeking to understand the extent of the programs that are being mopped up, for want of another word, to put into this fund and who it will affect so that people are very clear that this fund is being established—as much as we agree with its intent—and that the people who are paying for this fund are people who are sick today, people who need to go to the hospital today, people who need their teeth dealt with today and people who are mentally ill today. These are funds that were previously allocated to programs to support people who are sick today and that will now go into the fund to provide medical research. We just need to be very clear about what we are doing.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

As I indicated in my second reading summing-up speech and as the government has openly and transparently indicated all the way through, the Medical Research Future Fund will be made up of contributions from a number of sources. About $1 billion in uncommitted funds from the Health and Hospital Fund and the 2014-15 budget savings in the health portfolio which have passed or will pass will go into the fund until the fund reaches $20 billion.

The government openly and transparently published those measures in the budget, as a government does—this government has and previous governments did—and Senator McLucas is exceptionally well aware of what those savings measures are. Indeed, the Australian community is aware of what those savings measures are. They were published in the budget. Those that are more controversial, for better or for worse, have been widely debated in the public domain for some time now. This is just a political stunt by Senator McLucas. When she asked me the same question in estimates—essentially asking me to relist all of the things that are already published in the budget papers—in an abundance of helpfulness, I answered the exact same question. I do not propose to hold up the Senate any longer with this sort of delaying tactic.

Obviously, in relation to the measures that have not passed yet—this is past history and everybody knows what has passed—I do not have a crystal ball to somehow identify what the Senate might be inclined to pass or not pass moving forward. That is going to be a matter for the Senate into the future. From the government's point of view, we hope that all of our remaining 2014-15 budget measures in the health portfolio and indeed across the whole of government will ultimately be supported by the Senate. But that is going to be a matter for the Senate at the appropriate time. That is not something that we are dealing with at this moment.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Mental Health) Share this | Link to this | Hansard source

So, Minister, if you are not going to share the detail—

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

So you asked me a question when you know the answer. You have made my point.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Mental Health) Share this | Link to this | Hansard source

The point is that I know but I do not think the community knows—and I think Senator Lambie might be interested in knowing this—that monies flowing from the cessation of the Tasmanian Nursing and Allied Health Scholarship and Support Scheme will be going into the fund. I thought Senator Wright might be interested in the reduced funding for the Partners in Recovery program, a program that is supporting people with very chronic mental health issues in our communities. The second tranche of the rollout of the Partners in Recovery program will not proceed. This program supports people in our community who are chronically mentally ill. But we are not going to continue with that program and we are going to put that money into the research fund, as important as it is. Then we have the National Tobacco Campaign. I know that Senator Di Natale is very keen on ceasing tobacco use in our country. Savings from the National Tobacco Campaign, a newer and lower cost media campaign, are going into the MRFF. The national partnership agreement on adult public dental services was another issue that I thought the Greens were pretty hot on. I thought they really believed that dental work was the next cab off the rank when it came to reform in our health system. Money from those programs will now go into the Medical Research Future Fund. Senator Cormann, this list goes for more than a page. I am astonished that you would not table this, so that Senator Lambie, in particular—

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

It has been tabled.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Mental Health) Share this | Link to this | Hansard source

I am talking about in the course of this debate, so that people are very clear what they are voting against and what they are voting for.

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

I need to put the question on this amendment in two parts. The first part is that amendments (1), (4) to (6), (9), (11) and (12) and (19) on sheet 7711 be agreed to.

Question negatived.

The second part of the question is that clauses (12) and (13) stand as printed.

Question agreed to.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Mental Health) Share this | Link to this | Hansard source

by leave—I now move opposition amendments (2), (7), (10), (13) and (16) on sheet 7711:

(2) Clause 4, page 4 (lines 12 and 13), omit "Priorities. The Health Minister takes the Priorities into account", substitute "Priorities and to make recommendations to the Health Minister on providing financial assistance. The Health Minister must take the recommendations and the Priorities into account".

(7) Clause 10, page 12 (lines 23 to 28), omit "The Health Minister takes the Australian Medical Research and Innovation Priorities (which are determined by the Australian Medical Research Advisory Board under Part 2A) into account in making decisions about the financial assistance that is provided from the Medical Research Future Fund Special Account", substitute "The Health Minister makes decisions about the financial assistance that is provided from the Medical Research Future Fund Special Account following recommendations by the Australian Medical Research Advisory Board and taking into account the Australian Medical Research and Innovation Priorities (which are determined by the Advisory Board under Part 2A)".

(10) Clause 15A, page 17 (lines 14 to 16), omit subsection (2), substitute:

(2) The Health Minister must not require the Finance Minister to debit an amount unless:

  (a) the Health Minister has received a recommendation regarding the debiting of the amount from the Advisory Board; and

  (b) the Health Minister has taken into account the Australian Medical Research and Innovation Priorities that are in force.

  (2A) A requirement under subsection (1) is of no affect unless:

  (a) the Health Minister has caused to be laid before each House of the Parliament:

     (i) the Advisory Board's recommendations regarding the debiting of the amount; and

     (ii) if the recommendation was that the amount not be debited—the Minister's reasons for requiring that the amount be debited contrary to that advice; and

(b) both Houses of the Parliament by resolution have approved the making of the requirement.

(13) Clause 32A, page 27 (lines 8 to 10), omit "Priorities. The Health Minister takes the Priorities into account in making decisions in relation to the financial assistance provided from the Medical Research Future Fund Special Account", substitute "Priorities and make recommendations to the Health Minister on providing financial assistance. The Health Minister makes decisions about the financial assistance that is provided from the Medical Research Future Fund Special Account following recommendations by the Advisory Board and taking into account the Priorities".

(16) Clause 32C, page 28 (before line 13), before paragraph (a), insert:

  (aa) to make recommendations to the Minister on financial assistance to be provided from the Medical Research Future Fund Special Account; and

These amendments go to the principle that the health minister must act on the recommendations of the advisory board. Labor's amendments will limit ministers to only give instruction to make debits from the MRFF when they are based on the recommendations of the advisory board.

As I have already outlined, Labor believes that this process should be strengthened more than this, including through introducing a process of independent expert review as well as greater transparency on how that occurs. Labor's amendments will introduce a requirement that a decision has no effect unless the health minister has caused for there to be laid before each house of the parliament the advisory board's recommendations regarding the debiting of the amount and, if the recommendation was that the amount not be debited, the minister's reasons for requiring that the amount be debited contrary to that advice and that both houses of the parliament by resolution have approved the making of the requirement.

These amendments are consistent with the way the NHMRC administers funding and consistent with the principle that I have outlined; that is, that the MRFF funding should be subject to the same rigour that we apply to the National Health and Medical Research Council grants. Labor agrees that we should be funding different sorts of research. We are not opposed to the notion of translational research. We agree that commercialisation is the next step from the investigative driven research that the NHMRC does so well in our country. But there is no reason that we should not be applying the same sorts of rigour to the assessment process. Again I go back to the comments of the former CEO of the NHMRC, Professor Warwick Anderson, when he said:

When judging how to use public money for research only peer review can identify what is favourable and what is not.

I also note the comments from the President of the Australian Society for Medical Research, when she said:

… taxpayers really want to know that their money is going towards funding the best possible high-quality research that delivers health outcomes. All the evidence based on peer review in this country—and we have done a lot of this work in this space with independent commissioned reports—suggests that NHMRC peer review has actually been very successful in delivering better outcomes.

This is not an argument against moving towards translational research or commercialisation. This is an argument that says that we have a terrific program of peer review that works on this particular part of the research agenda, and we should use that same system to ensure that we get better translational outcomes and better commercialisation outcomes.

The bill as it has been drafted does not provide these assurances. That is why Labor is moving these amendments. They do not go as far as Labor would in government to improve the mechanism for distributing money from the MRFF, but they do improve the government's bill significantly. I commend the amendments to the chamber.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

The government has thought very deeply about how best to ensure appropriate integrity in decision-making, appropriate independence and appropriate governance and transparency in relation to the disbursement of these funds into appropriate medical research priorities. We certainly have very carefully considered the arguments that have been put forward by various stakeholders in the context of the community affairs committee inquiry by the Greens and also those that have been put forward by the Labor Party. But, with all due respect, on reflection we do no not believe that what Labor is proposing is workable, and we do not believe that what Labor is proposing would help us to close the gap in the medical research funding arrangements that currently exist in Australia.

Let me explain. We have gone out of our way to ensure that we have a very strong, very robust, very independent and highly qualified Medical Research Future Fund advisory board arrangement. That advisory board has been tasked with the responsibility of setting the priorities and the strategy, and the government certainly has to comply with the priorities and the strategy as determined by the advisory board. To take that further step that Senator McLucas has just mentioned—making any of the advisory board recommendations binding on the Minister for Health in relation to specific funding decisions—would effectively mean that the advisory board becomes the funding body. The starting principle in designing the board is that they are to be separated from specific grant decisions to avoid conflicts of interest. The best talent and the best experience is required for the board, and this inevitably means that there will be conflicts. It is not tenable to have people deciding what money goes to themselves. The priorities and strategy—and the way that is determined by the advisory board—have to have the highest level of integrity. If there is no question of conflict, the National Health and Medical Research Council and other bodies have the skills and systems for ground-level disbursements, and that is what we propose to continue into the future.

We believe that the process the government has put forward is a robust process. It is a process that provides for the appropriate levels of independence but also ensures that this is a workable, more efficient system that is successful in filling the gaps that are currently in place across Australia when it comes to medical research. As Senator Di Natale very rightly pointed out in his contribution earlier, the government of the day, whether that is us or whether it is a future government, has to have the flexibility from time to time to respond to urgent requirements. To put a very burdensome administrative process in place as is proposed by the Labor opposition would not help to facilitate that.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Mental Health) Share this | Link to this | Hansard source

I have a question for the minister. The minister said that the amendment as we have proposed is unworkable. Could he explain what he means by that, please.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I have just explained that.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Mental Health) Share this | Link to this | Hansard source

We will play the game that way, then. Minister, you also said that you cannot have the board as the funding body. Our amendments go to point where, if the minister makes a different decision from what has been recommended by the funding body then she has to come into the parliament and explain that different decision. That does not militate against the minister making a different decision, but it makes it very transparent. When you are talking about these board members—and I agree that they will be people of the utmost ability and integrity—if their recommendations to the minister are not being adopted, we need to know about that. Why are the amendments as we have drafted them unworkable?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

In an abundance of helpfulness I will make the point again and I will try to make it succinctly. Firstly, the decisions of the advisory board are binding on the minister. The decisions the advisory board make are decisions about priorities and strategy. The advisory board does not make decisions about specific funding allocations—and they should not, because we believe that that would make the system unworkable for the reasons that I explained in my previous contribution. As far as parliamentary approvals are concerned—Labor has been in government in the past and I suspect that, sadly, they might well be in government at some point in the future—are you really suggesting that every single funding decision should be subject to a vote of the parliament? Really?

That is just insane. There is an enormous impracticality about how Labor proposes to administer this funding. Effectively, Labor is proposing that every decision by the health minister to debit funding must go to a vote in both houses of parliament. This would put every single decision on funding into the political system. It would make some funding decisions susceptible to political lobbying and undue influence by the loudest voices.

Political lobbying can not only be directed at the government of the day; it can also be directed at the other possible majority in the Senate that is not necessarily a government majority of the day. This would detract from the dispassionate, expert-driven model which is in the government's bill. This model is also highly impractical where there is a need for an urgent response to a health crisis. Finally it would be damaging for Australia's international reputation if major research companies have their investment plans upended by political decisions after they have passed through rigorous application processes run by professional administrative authorities.

How do you think that reputable, serious research organisations would put themselves into a process where any individual funding decisions ultimately becomes a political football in the Australian Senate? It is a ridiculous proposition. It does not do the Labor Party any credit to come up with proposals like this. In my initial response I sought to be kind and I did not want to go into too much detail in relation to this. It is not a serious proposal. The government has very seriously and deeply considered the best way to approach this. To suggest that the parliament should be put in a position of having to make a decision on every single funding application is just ridiculous.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Mental Health) Share this | Link to this | Hansard source

Minister, that is misrepresenting the intent of the amendments as we have drafted them and you know that. What we are trying to avoid by the drafting of these amendments is that we limit any political intervention as much as we possibly can. We know that the health and medical research dollar is hard to find and that it must be applied in the most effective and efficacious way. That is why we have drafted these amendments. These amendments are intended to remove political interference in the decision making of the allocation of funds. That is why we will strongly support these amendments. Again, I recommend them to the chamber.

The CHAIRMAN: The question is that opposition amendments (2), (7), (10), (13) and (16) on sheet 7711 be agree to.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Mental Health) Share this | Link to this | Hansard source

by leave—I move opposition amendments (3), (14) and (15) on sheet 7711:

(3) Clause 5, page 4 (line 26), after "Board", insert "of the NHMRC".

(14) Clause 32B, page 28 (line 4), after "Advisory Board", insert "of the NHMRC".

(15) Clause 32B, page 28 (after line 4), after subsection (1), insert:

  (1A) The Advisory Board is taken to be a Principal Committee within the meaning of the National Health and Medical Research Council Act 1992, other than for the purposes of the following provisions of that Act:

  (a) sections 5D and 5E;

  (b) section 35;

  (c) section 41;

  (d) section 80;

  (e) subsections 82(1C) and (2).

  (1B) This section has effect despite the definition of Principal Committee in section 4 of the National Health and Medical Research Council Act 1992.

These go to a formal role for the National Health and Medical Research Council.

I did indicate earlier that Labor does see a formal role for the NHMRC in administering MRRF disbursements. As a supplementary report from Labor Party senators to the Senate inquiry made clear, a Labor government would seek to amend the NHMRC Act—

The CHAIRMAN: Senator Wright—do you have a point of order?

Penny Wright (SA, Australian Greens) Share this | Link to this | Hansard source

Yes, Mr Chairman. I am having real difficulty hearing Senator McLucas. Would you mind just drawing the chamber's attention to that please?

The CHAIRMAN: That is fair enough—you are a long way away down there and there are still too many people in the chamber having conversations. I would ask those senators, particularly near Senator Wright to stop.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Mental Health) Share this | Link to this | Hansard source

I am pleased that the Greens are interested in listening to me—that is very good!

As we made clear in this supplementary report to the Senate inquiry, a Labor government would seek to amend the NHMRC Act to ensure that, whilst the MRRF special account were to remain independent, the role of any MRRF advisory committee would be reflected in the NHMRC council structure, with the same sort of rigor applied to funding assessment as the NHMRC does through its existing grant schemes.

Whilst it is not possible to make such significant amendments through this bill, these amendments do go some way to achieving this objective by reflecting the NHMRC committee structure as it is defined in the NHMRC Act in the proposed MRRF Act. Specifically, Labor's amendments include the provision that the advisory board is taken to be a principal committee within the meaning of the National Health and Medical Research Council Act 1992. I commend these amendments to the chamber.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

The government appreciates the opposition's intention here, but we do not support these amendments because they would not achieve the objective of the bill to establish a fund which will address existing strategic gaps in Australian medical research investment which, incidentally, were identified in a review—the McEwan review—initiated by the previous Labor government.

The government will definitely use the NHMRC's robust funding distribution processes where those are the most appropriate means of implementing its MRRF disbursement decisions. Other existing Commonwealth bodies will also be enlisted to implement the rollout or to undertake MRRF-funded research where they have the most suitable administrative mechanisms or expertise. For instance, the CSIRO or the ARC.

The clear majority of witnesses who expressed views about the NHMRC in the Senate Community Affairs Committee inquiry concluded that the NHMRC is not suited to running the MRRF. The opposition's amendment would burden the NHMRC with significant additional administrative responsibilities that are not practical or, in our judgement, appropriate. When Labor was in government they commissioned the McEwan review, which found that Australia needs a more strategic model to get the best health results. Burdening the NHMRC with both a strategic and an operational role would be inconsistent with the intent of building proper coordination and specialisation into the system.

In contrast, the government's approach would help establish a new, strategically focused organisation while keeping the NHMRC doing what it does best, as an expert distributor of funding for investigator-led projects.

Penny Wright (SA, Australian Greens) Share this | Link to this | Hansard source

The Australian Greens have considered the issues that have been raised by Labor but note that these issues were canvassed in the committee inquiry into the bill. The Australian Greens are happy with the governance arrangements contained in the bill, as are stakeholders, and note that the CEO of the NHMRC will be in a position on the advisory board—not representing the NHMRC, but certainly there will then be coordination and liaison on the advisory board for the MRFF.

Further, the Australian Greens understand that these amendments are not detailed enough to actually create a new process within the NHMRC in any event. We have been advised that they are not workable, and that is our view.

The TEMPORARY CHAIRMAN (12:23): The question is that amendments (3), (14) and (15) on sheet 7711 be agreed to.

Question negatived.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I seek leave to move all of the government amendments together.

The TEMPORARY CHAIRMAN (12:23): Just for clarity: leave is being sought to move all government amendments, not just the government amendments listed in this section on the running sheet. I do not want anyone to be confused about that. There being no objection, leave is granted.

I move all of the government amendments on running sheet HK148 as a block:

(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.

(2) Clause 15A, page 17 (lines 10 to 12), omit note 1, substitute:

Note: The Health Minister must report on matters relating to the financial assistance provided from the Medical Research Future Fund Special Account (see section 57A).

(3) Clause 15A, page 17 (line 13), omit note 2.

(4) Clause 15A, page 17 (lines 14 to 16), omit subclause (2), substitute:

(2) In determining whether to require the Finance Minister to debit an amount, the Health Minister:

  (a) must take into account the Australian Medical Research and Innovation Priorities that are in force; and

  (b) has the power to seek expert advice on the merits of making the grant to which the debit relates; and

  (c) may consider any other relevant matter.

(5) Clause 15A, page 17 (after line 17), at the end of the clause, add:

Note: The Health Minister may, under section 61A, delegate a power under this section.

(6) Clause 21, page 21 (after line 17), at the end of subclause (1), add:

Note: The Health Minister must publish on the internet information about the grant—see section 58.

(7) Clause 24, page 22 (line 21), omit "Note", substitute "Note 1".

(8) Clause 24, page 22 (after line 22), at the end of the clause, add:

Note 2: A body that receives a grant may be acting in partnership with an overseas body or other body in relation to the medical research or medical innovation.

(9) Clause 29, page 24 (after line 10), at the end of subclause (1), add:

Note: The Health Minister must publish on the internet information about the grant—see section 58.

(10) Clause 32D, page 29 (after line 19), at the end of subclause (3), add:

Note: The Advisory Board is also required to provide a consultation process before determining the Strategy—see section 32EA.

(11) Clause 32E, page 30 (after line 22), at the end of subclause (3), add:

Note: The Advisory Board is also required to provide a consultation process before determining the Priorities—see section 32EA.

(12) Page 31 (after line 7), at the end of Division 3, add:

32EA Consultation process before determining an Australian Medical Research and Innovation Strategy or Australian Medical Research and Innovation Priorities

(1) Before determining an Australian Medical Research and Innovation Strategy, or Australian Medical Research and Innovation Priorities, the Advisory Board must provide a process for consulting:

  (a) organisations with expertise in medical research or medical innovation; and

  (b) organisations that represent consumers who benefit from medical research or medical innovation; and

  (c) any other person or organisation.

(2) This section does not limit section 17 of the Legislative Instruments Act 2003.

(13) Clause 32G, page 32 (line 19), after "management", insert "or delivery".

(14) Clause 32G, page 32 (line 22), omit "commercialisation.", substitute "commercialisation;".

(15) Clause 32G, page 32 (after line 22), at the end of subclause (2), add:

  (g) philanthropy;

  (h) consumer issues relating to health.

(16) Clause 54, page 49 (line 11), omit "on the", substitute "on matters relating to the".

(17) Clause 57A, page 50 (after line 29), after paragraph (2)(a), insert:

  (aa) a description of the processesfor determining the grants of financial assistance; and

(18) Clause 58, page 51 (lines 7 to 11), omit the clause, substitute:

58 Health Minister must publish information

(1) As soon as practicable after any of the following amounts have been debited, the Health Minister must publish on the internet information about the grant to which the debit relates:

  (a) an amount debited from the COAG Reform Fund under subsection 21(1);

  (b) an amount debited from the MRFF Health Special Account under subsection 26(1);

  (c) an amount debited from the Medical Research Future Fund Special Account under subsection 29(1).

(2) Without limiting subsection (1), the information must include the following:

  (a) the amount of the grant;

  (b) the person or body to whom the grant was paid;

  (c) any other relevant matter.

(19) Clause 62, page 53 (line 32), before "The", insert "(1)".

(20) Clause 62, page 54 (after line 2), at the end of the clause, add:

(2) Without limiting subsection (1), the review must consider whether financial assistance provided under this Act has:

  (a) complemented and enhanced other financial assistance provided by the Commonwealth for medical research and medical innovation, including through the National Health and Medical Research Council; and

  (b) otherwise affected the total amount of other financial assistance provided by the Commonwealth for medical research and medical innovation.

Medical Research Future Fund Bill 2015

HK148

Statement of reasons: why certain amendments should be moved as requests

Section 53 of the Constitution is as follows:

Powers of the Houses in respect of legislation

53. Proposed laws appropriating revenue or moneys, or imposing taxation, shall not originate in the Senate. But a proposed law shall not be taken to appropriate revenue or moneys, or to impose taxation, by reason only of its containing provisions for the imposition or appropriation of fines or other pecuniary penalties, or for the demand or payment or appropriation of fees for licences, or fees for services under the proposed law.

The Senate may not amend proposed laws imposing taxation, or proposed laws appropriating revenue or moneys for the ordinary annual services of the Government.

The Senate may not amend any proposed law so as to increase any proposed charge or burden on the people.

The Senate may at any stage return to the House of Representatives any proposed law which the Senate may not amend, requesting, by message, the omission or amendment of any items or provisions therein. And the House of Representatives may, if it thinks fit, make any of such omissions or amendments, with or without modifications.

Except as provided in this section, the Senate shall have equal power with the House of Representatives in respect of all proposed laws.

Amendment (1)

The effect of this amendment is to expand the definition of medical innovation. It is covered by section 53 because it increases a proposed charge or burden on the people. The amended definition expands the purposes for which amounts may be paid from the Medical Research Future Fund Special Account established by section 14 of the Medical Research Future Fund Bill 2015, with those payments being made out of the Consolidated Revenue Fund under the standing appropriation in section 80 of the Public Governance, Performance and Accountability Act 2013.

Medical Research Future Fund Bill 2015

SHEET HK148

Statement by the Clerk of the Senate pursuant to the order of the Senate of 26 June 2000

Amendment (1)

This amendment provides for a new definition to clarify that medical innovation covers a broad spectrum of activities with an emphasis on outcome, ie, to improve the health and wellbeing of Australians.

The Medical Research Future Fund (MRFF) special account is established by clause 14 of the bill, a special account for the purposes of the Public Governance, Performance and Accountability Act 2013. The special account sets aside an amount within the Consolidated Revenue Fund to be expended for special purposes. Clause 16 of the Medical Research Future Fund Bill 2015 limits the amount that can be debited from the MRFF (the maximum annual distribution) and that amount is determined by clause 34 of the bill.

Although this amendment may expand the purposes for which amounts may be paid from the MRFF, it does not affect the appropriation for the special account. Because the MRFF is limited in its amount by the maximum annual distribution set in accordance with clause 34, there can be no increased appropriation as a clear, necessary and direct consequence of the amendment.

The Senate has long followed the practice that only an amendment which "clearly, necessarily and directly" affects an appropriation is regarded as an increase in a charge or burden on the people within the meaning of section 53 of the Constitution (Odgers' Australian Senate Practice, 13th edition, p. 394). This amendment does not increase the total amount available under the appropriation (which is limited by the maximum annual distribution). Amending a bill to change the allocation of proposed expenditure and the purposes for which money is to be appropriated has long been considered to be within the power of the Senate, provided that the total proposed (or available) expenditure is not increased.

For these reasons the amendment would not be regarded as a request under the precedents of the Senate.

The TEMPORARY CHAIRMAN (12:23): Just before you speak to them, Minister, now that you have moved them, I will ask: is it the wish of the committee that the statement of reasons accompanying the request be incorporated in Hansard immediately after the request to which they relate?

There being no objection, it is so ordered.

Amendment (1) on sheet HK148 has been circulated by the government in the form of a request, for the reasons given in the statement attached to the sheet of amendments. The second statement by the Clerk of the Senate indicates that, under the precedents of the Senate, the amendment would not be regarded as a request.

The third paragraph of section 53 of the Constitution provides that the Senate may not amend any proposed law so as to increase any proposed charge or burden on the people.

Amendment (1) provides for a new definition to clarify that medical innovation covers a broad spectrum of activities with an emphasis on outcome—that is, to improve the health and wellbeing of Australians. Medical innovation projects are to be funded by the Medical Research Future Fund special account, established by clause 14 of the bill. The special account sets aside an amount within the Consolidated Revenue Fund to be expended for special purposes. Clause 16 of the Medical Research Future Fund Bill 2015 limits the amount that can be debited from the fund, an amount determined by clause 34 of the bill.

Although this amendment may expand the purposes for which amounts may be paid from the fund, it does not affect the appropriation for the special account which is limited. There can be no increased appropriation as a clear, necessary and direct consequence of the amendment because the amendment does not increase the total amount available under the appropriation. There is, therefore, no increase in any proposed charge or burden on the people.

The Senate has long followed the practice that only an amendment which 'clearly, necessarily and directly' affects an appropriation is regarded as an increase in a charge or burden on the people within the meaning of section 53 of the Constitution. Amending a bill to change the allocation of proposed expenditure and the purposes for which money is to be appropriated has long been considered to be within the power of the Senate, provided that the total proposed, or available, expenditure is not increased.

Accordingly, the amendment will be dealt with as an amendment.

Thank you, Chair, for that clarification. The government did indeed receive advice from the office of parliamentary counsel that item 1 of the amendment on sheet HK148 should be considered a request under section 53 of the Constitution. However, we understand that the Clerk of the Senate has considered that advice and formed the contrary view, as reflected in your statement just now. I note this difference in view. I signal that the government accepts the view that item 1 is an amendment. It is on that basis that I have moved all of the amendments together.

Most of the amendments directly respond to issues raised in the Senate inquiry and recommendations made in the majority report of the Community Affairs Legislation Committee. Specifically in relation to consultation, one of the concerns raised in the submissions was whether the consumer voice would be sufficiently heard or represented in the decision making. The solution recommended by the community affairs committee was that there be a consultation process through the formulation of the Australian medical research and innovation strategy and the Australian medical research innovation priorities to allow the consumer perspective to be taken into account. The government sees great value in this, and our amendment gives effect to that.

In relation to board composition, a number of submissions made suggestions on the composition of the advisory board, particularly the required expertise and knowledge of members. To incorporate these suggestions we are proposing to require that some of the board members have experience and knowledge in philanthropy and consumer issues relating to health. The amendments also clarify that clinical trial expertise is part of the selection criteria. These additions in the bill will not create a large unworkable advisory board because these do not create new ex officio positions; rather these are additions to the skills criteria for making appointments to the board.

In relation to the qualifying activity, a number of submissions to the Senate inquiry raised concerns that the definition of medical innovation may be unintentionally narrow. In particular there was concern that use of the term 'treatment' within the definition might not encompass investment in diagnosis or prevention. Our amendments clarify that those activities are in scope, and the supplementary explanatory memorandum also names these fields of research along with other qualifying activities that were discussed in the committee hearings. The government fully intends that the definition be a broad one, subject to direction from the advisory board on where the greatest focus should be over time.

In relation to expert advice, a number of submissions suggested there be clarity on the role of expert advice and informing decisions on distribution from the MRFF to enhance the decision-making process for distributions from the MRFF. Our amendments give the health minister an additional power to seek expert advice on the merits of a grant for financial assistance prior to requesting the Minister for Finance to debit an amount from the MRFF special account. This amendment permits delegation of the minister's power to officials as needed to enable efficient and professional administration of spending.

In relation to transparency, to further increase the transparency of distributions from the MRFF we are expanding on our earlier amendment that requires the health minister to publish information on the internet regarding grants. The provision will now cover all categories of grants paid from the MRFF Special Account. This ensures that the online information is comprehensive and complete. A further amendment is proposed to clarify what information is required to be published in relation to grants to ensure it includes the amount of each grant and the identity of the person or body to whom it was paid.

In relation to the decision-making processes, some submissions argued that grants made from the MRFF should be determined through a competitive process consistent with the processes adopted by the NHMRC, but other submissions from leading experts in the medical research field recognise that a competitive process is not possible or appropriate in all situations—for instance, when a rapid decision and response is required such as in dealing with an epidemic. The Senate committee report summarised a number of examples where a peer review or other academic forms of competitive process may not always suit, including where there is greenfields research, a complex multidisciplinary breakthrough or commercialisation or enabling infrastructure are the focus rather than pure research. There may be good reasons why particular decisions have distinctive processes, and the government recognises that it is in the public interest for the nature of all decisions processed to be published.

Our amendments would ensure that the health minister's biannual report to parliament provides transparency by describing the processes used for determining the allocation of grants from the MRFF Health Special Account. There are also some amendments that are self-explanatory in relation to international partnerships, governance review and the review of the act, following on from recommendations made by the committee. But, in relation to the review of the act in particular, as I flagged in my second reading contribution, the government is moving amendments to ensure that the review also includes an assessment of overall levels of federal funding for medical research in order to provide transparency around our assertion that this will increase, not just shift funding for medical research overall.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Mental Health) Share this | Link to this | Hansard source

Labor acknowledges that the 20 new government amendments that arrived in this chamber at 9:30 this morning do to some extent improve the bill, but they still fail to formally recognise the existing NHMRC structures for distributing funds and they fail to include any expert review or peer review process.

The government has taken into account Labor's amendments that there be representation on the advisory board from a health consumers perspective, and this is welcome. This was the next tranche of amendments that Labor was going to make to the bill. But why did it take till 9:30 this morning for the government to realise that this would have been a good idea? The government has been working on this for 18 months. Surely in the last 18 months someone somewhere said, 'I think it'd be a good idea to have the consumer representative on the advisory board.' But it has taken until the day that this bill will pass the Senate for them to realise that and hear that.

This has been an appalling example of consultation. This is a signature policy, this policy that is going to be so important—the largest medical research fund in the world—and we are making amendments on the membership of the advisory board at half past 12 when the bill is going to be carried by lunchtime. This is not the way to consult and this is not the way to do business. This is not the way to govern. This should have been done better. The work on this bill was not done by this government, and it is a shame that we will end up with a bill that is substandard.

The intent of the bill, as Labor has said, is good, but the way we disperse these funds is fundamentally important to be absolutely transparent, absolutely unable to be politicised and absolutely assuring the taxpayers of our country and the research community that we will get the best outcomes from this money. Labor will be supporting these amendments. I wish we had had more consultation in the process.

Penny Wright (SA, Australian Greens) Share this | Link to this | Hansard source

The Australian Greens indicate that we will be supporting these government amendments. The Greens note that the committee process considered issues around governance of disbursements, the scope of the research that can be funded and reporting and priority setting, all of which were important issues, and we are satisfied that the government has taken into account the feedback from the community on those significant areas.

In addition, the Australian Greens raised two further issues. One was concern that the fund would be used as an excuse to reduce funding to the National Health and Medical Research Council, which of course would have been totally undesirable, and we see that this has been addressed in government amendments, so we are satisfied about that. The second concern that we did raise was that it would be desirable to look at some form of return to taxpayers of the significant public investment that is going to be made in this fund that will almost inevitably generate some private benefit to private organisations, and how some of that benefit could be recouped back into the fund to benefit the public again.

We are satisfied that that second issue has been initially addressed by the minister's comments but also that it will and should be reviewed over time, and certainly the Australian Greens will be looking to that and looking at that review that occurs. Given those comments I do indicate that the Australian Greens will be supporting these government amendments.

Question agreed to.