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

Here we have yet another Liberal bill designed to clear up a mess of the Liberals' own making. You would be forgiven for thinking that's all this government does when it comes to health—clean up messes of its own making. That seems to have been the minister's No. 1 preoccupation over the last 18 months, desperately trying to right some of the egregious wrongs perpetrated by his two Liberal predecessors.

This Health Insurance (Approved Pathology Specimen Collection Centres) Tax Amendment Bill 2018 amends the Health Insurance (Approved Pathology Specimen Collection Centres) Tax Act 2000—I will call it the 'pathology tax act'—to change the frequency of the tax paid by approved pathology collection centres. Presently, each of Australia's roughly 6,000 collection centres pay a tax of $1,000 when they're first approved and then when their approval is renewed each year. Under this bill, collection centres will pay a tax of $2,000 every two years instead of $1,000 every year. There is a big debate to be had about that, apparently. This is intended to reduce regulatory burden for the government and industry while maintaining the revenue raised by the tax. The rate of the tax has not been increased since it was first introduced in 1999, and the government argues there should be no increase in tax at this time, to ensure that smaller providers are not negativity impacted. I note that, in fact, there has been substantial consolidation in pathology over the course of the last few years. Now only three per cent of the pathology industry is made up of smaller pathology providers and, increasingly, they are being swallowed up by the larger pathology providers, and the market has become very, very concentrated.

I have also asked the Department of Health to tell me how much is raised each year by the pathology tax. We think it is around $6 million but it would be good if the minister, in summing up, could actually clarify that. It is a question we did ask of the department. I also ask the Department of Human Services what the cost is of actually administering this taxation system and the value of the reduced regulatory burden to government and industry. I haven't been given any answers to those questions yet and I would expect the minister, in his summation, to be able to do so.

All of that in the bill sounds fair enough. Regulatory burden changes are fairly minor changes, and Labor of course will support the passage of these bills through this place and in the other place. Although I note the fact that the tax has not been increased for some 18 years—it hasn't been indexed, as I understand it—is pretty surprising. It is a very small amount of money paid compared to the profits of the large providers that now dominate this pathology sector.

But let's look at the real reason the government is having to introduce this bill. This is damage control. It's clearing the decks before the next election. I've said it before and I'll say it again: the government has spent the lion's share of its second term in health cleaning up the messes it made in its first, and this bill is a classic example of that.

This issue goes back to 2009, when Labor first introduced bulk-billing incentives for pathology and diagnostic-imaging services. These incentives were an additional payment made to providers who chose to bulk bill their patients in an out-of-hospital setting so patients would not face out-of-pocket costs. It came about at a time when Labor was making sensible savings to pathology rebates, but we wanted to ensure that, at the same time as we were making those savings to be reinvested in health and health areas, those savings did not have an impact on patients. It was a sensible policy, and it worked. By 2014-15, of the 104.3 million pathology services provided out of hospital, almost all of them—98.7 per cent—were done at no cost to the patient. In fact, the percentage of bulk billing actually increased in pathology as a result of the bulk-billing incentive. In diagnostic imaging, it increased by 10 per cent in just six years thanks to those bulk-billing incentives. As Michael Gannon, the now former president of the AMA, said:

At a time when Medicare rebates for pathology and diagnostic imaging services have been frozen for more than a decade, the bulk billing incentives have been vital in ensuring that all patients can have ready access to these services, regardless of their financial circumstances.

So what did the brains trust over on the other side decide to do? What they always do in the Health portfolio: they basically decided that they were going to get rid of this bulk-billing incentive. Not long after the Prime Minister took over the top job, the Liberals delivered their Mid-Year Economic and Fiscal Outlook and, having learnt nothing from the public backlash to their substantial previous health cuts, they decided in MYEFO to go at health again. One of the most significant cuts was to Labor's bulk-billing incentives in a bid to save some $650 million. This was back in the days before the 2016 election, when the Liberals didn't even try to hide their cuts, and there was no commitment to reinvest any of that money in the Health portfolio; rather, the money was going to fund other policy priorities, not in health at all. Frankly, health is always this government's last priority. After all, they'd rather give big business an $80 billion tax cut than properly fund our hospitals.

The announcement came as a shock to many, particularly given that the government's review of Medicare services was still underway at the time—and is still underway to this date—and pathology had not even started to be looked at yet. Why pre-empt such a major review by making such a major change to the Medicare Benefits Schedule in this way? That's the problem with this government. With every measure this government takes, they just use blunt instruments without thinking them through—without consulting or negotiating, they just announce them—and, at the end of the day, it is patients who suffer.

This announcement also pre-empted the expiration of the July 2016 five-year agreement between the pathology sector and government, a document which governed arrangements around Medicare-funded pathology and something the Liberal Party said that it would support. The then Minister for Health, the member for Farrer, argued that bulk-billing incentives for pathology were no longer needed because the sector was naturally very competitive. We on this side knew that these changes would directly hurt patients, forcing out-of-pocket costs even higher. Obviously, the pathologists were always going to pass those costs on to patients. Even worse, it would force some people to delay getting tests, putting their lives at risk. So we did what Labor always does when the Liberals try to cut from our health system: we fought back, vowing to use every mechanism we could to kill off this measure in the Senate. The sector fought back too. Describing it as a co-payment by stealth, the AMA warned that the move would hit the poorest and sickest the hardest. But when has this government ever cared about those people? They only care about the people they want to give an $80 billion tax cut to.

Dr Gannon said the evidence showed that many patients, particularly the sickest and most vulnerable, deferred seeking treatments because of cost, exacerbating their pain and suffering and ultimately adding to the nation's overall health bill. The peak group Pathology Australia warned that not only would bulk-billing rates fall but that some pathology collection centres would be forced to close, including those in rural and regional areas and in hospitals. The sector's Don't Kill Bulk Bill campaign gave us the immortal image of the member for Farrer dressed as Uma Thurman's sword-wielding bride from Quentin Tarantino's film. I thought she pulled that look off quite nicely, but that campaign also delivered a petition of 600,000 signatures, showing once again that the Australian people were deadset against this government's health cuts and that they were just not going to tolerate it.

This campaign clearly gave the Prime Minister quite a fright. The campaign went on for a while, with 600,000 signatures collected across the country, but the next thing you knew was that the Prime Minister was standing up in the first leaders debate with the Leader of the Opposition, suddenly announcing that he'd struck a deal with the pathology sector in a bid to shut them up for the rest of the campaign. That was all that was about. It was a shameless and cynical stunt to get his government through the election. It was the move of a desperate Prime Minister, committed to funding cuts but praying that the Australian people wouldn't find out about them. It was a dodgy deal, probably scrawled on the back of an envelope or napkin somewhere. Pathologists, however, accepted the abolition of bulk-billing incentives in exchange for a government pledge to regulate the rents that pathologists paid GPs to co-locate in their practices. 'Deal done,' the government thought. 'Problem solved. We've got them to be quiet during the election campaign. All good.'

Well, not so fast. We knew, the minute that was announced, that the government had not told the truth. We knew that GPs would be furious about it, many of them having already based their business cases on those rents. The two largest pathology companies attempted to outbid each other, trying to get themselves into collection centres in practices, particularly in areas where lots of pathology treatments were available. They were outbidding each other. They had bid the rents up so high and then complained about them, getting the government to agree, despite the fact that GPs had put their entire business case on the basis of this income—many expanding their practices substantially—and suddenly that was going to be done over. You have to be kidding! We absolutely knew the government had no intention to deliver—nor could it actually deliver—on that promise. GPs were absolutely furious. So in the government's hasty attempt to buy the silence of the pathology sector, it made enemies of the family doctors across the country. Terrific. A genius move.

The government was already at war with GPs after its attempt to increase the $7 co-payment and then freeze the Medicare rebates. At least in that sense the government is consistent. It can't help picking fights with the medical profession. As the AMA pointed out, the rents deal plunged GPs across the country into uncertainty about an important element of their business. Many of the practices that leased space to pathologists are small businesses that negotiated leases in good faith with larger multinational pathology providers. They made business decisions based on projected rental streams, including investment in infrastructure and staffing which helped to keep them viable. The AMA's Michael Gannon said:

GPs are sick of being told by politicians on both sides that they are highly valued, but then hit with Government policy that consistently hurts practice viability.

I doubt that the government truly contemplated the extent of the impact of its election commitment when it was announced. This is, frankly, typical of this government's approach when it comes to health: half-baked ideas and unnecessary cuts followed eventually by the inevitable humiliating backflip. The government capitulated again, using its 2017 budget to break its deal with pathologists to reverse its cuts to bulk-billing. In fact, gallingly, the minister keeps saying, 'We've invested with this new $650 million in pathology and diagnostic imaging.' You've reversed your own cuts—that's what you've done—and ditched the rent regulation plan. As I said, it backflipped on the $650 million of cuts that set off this whole sorry saga in the first place.

This bill is one of a number of policy changes that the government has offered the pathology sector by way, frankly, of a grovelling apology. No stakeholder in health should trust this government when it says that it's doing a deal. That is the lesson that Pathology Australia, the Diagnostic Imaging Association and GPs across the country should read from what we've seen in this bill. When this government does a dodgy deal, it is just that: it is a dodgy deal that it does not honour.

This bill is not about health policy; it is a dispute resolution. As I said at the start of this speech, that is pretty much all you see from this government in health: no vision about the health of this nation; no vision about the development and future needs of the healthcare sector in this nation; and no strategy—just constantly having to clean up mess after mess after mess. While Labor will be supporting this bill, it's important for the record to reflect the real reasons that this bill has in fact been brought before this parliament. I move the second reading amendment that's been circulated in my name:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House condemns the Government for its attack on pathology bulk billing and notes its desperate pre-election deal with corporate pathology giants".

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