Kylea Tink (North Sydney, Independent) Share this | Hansard source

I rise today to speak on behalf of the people of North Sydney on the National Health Amendment (General Co-payment) Bill 2022. As we move into the last quarter of 2022, and with the holiday and festive gifting season rapidly approaching, there is no doubt most Australians are finding it harder to juggle or simply meet living expenses. Whether we're single, coupled or part of a family, we're all experiencing levels of inflation we have not seen since 1990, with economists predicting it will rise yet further to somewhere in the vicinity of 7½ per cent before the year ends. In real terms this means many more people are actively weighing up their purchasing decisions as the price of essential items like fruit and vegetables, bread and cereal and clothing all increase to varying degrees. There are many things driving this inflationary pressure: floods and heavy rainfall in major production areas across New South Wales and Queensland; grain supply shortages prompted by Russia's invasion of Ukraine; higher freighting costs both domestically and internationally; and disrupted production lines due to COVID.

Interestingly, however, one area that has reportedly seen an average consumer price decrease in the nine months to September is medicine. Reports indicate that the price of pharmaceutical products has fallen by 1.1 per cent. This price drop is largely driven by an increasing number of consumers qualifying for subsidies under the Pharmaceutical Benefits Scheme. So while the share that these products are taking up in our ordinary consumer shopping basket is decreasing, the overall cost to us as a society via our government is increasing. Reports indicate that the true average dispensed price—that is, the price of the medication with both the patient co-payment and the government benefit—per prescription of a product on the Pharmaceutical Benefits Scheme increased by five per cent to $70.65 in 2020-21, as opposed to $67.34 in 2019-20.

In this context, then, as the government tabled this bill during our last sitting period I confess I was struck by the quandary that this proposed legislative reform creates for us as a society. While this legislation will reduce the price consumers pay for a medicine listed on the Pharmaceutical Benefits Scheme by around 32 per cent from its current cost of $42.50 down to $30, ultimately the cost differential—the $12.50 that the consumer no longer pays directly—will still be borne by Australian taxpayers as we rightly maintain this parliament's commitment to fund the overall PBS program.

Since the program's expansion in 1960, patients have generally contributed to covering the cost of their medicines by paying a fixed amount of the overall cost. Concession card holders pay less, and rightly so. Overall, once a patient has spent a certain amount on their medicines they can qualify for the PBS safety net, which then sees people pay a lower amount for their medicines, with concession card holders receiving them for free. In the truest sense, then, the amendments proposed in this bill will most benefit those who do not routinely purchase a substantial number of PBS listed medicines a year and who do not qualify for a concession card.

This is when we must recognise the reality that while the price may not be paid up front, it will eventually be covered by the public purse through the tax we pay. The impression of money saved here should not go unchallenged. Make no mistake: I sincerely believe we have one of the best healthcare systems in the world in Australia, and I am a massive advocate of our public health system. Indeed, for most of my adult life over the last 30 years I have worked in one way or another to improve the quality of care that Australians receive when they need medical assistance. In some instances, this has seen me actively work to have life-saving medications added to the Pharmaceutical Benefits Scheme.

Initially established as a limited scheme in 1948, with free medicines for pensioners and a list of just 139 life-saving and disease-preventing medicines provided free of charge for others in need in the community, the Pharmaceutical Benefits Scheme as we know it today is a much-valued provider of timely, reliable and affordable access to necessary medicines for all Australians. For all its strengths, however, the reality is we must ensure we do not lose sight of the public costs associated with operating the Pharmaceutical Benefits Scheme.

Data on the cost of the Pharmaceutical Benefits Scheme in this immediate past financial year does not appear to be available as yet. However, assuming a level of cost consistency, let's look at data from the end of June 2021. Government expense for the supply of medicine for that financial year was nearly $14 billion—or $13.8 billion to be precise. That compares to $12. 6 billion in the previous year. That's an increase of nine per cent in 12 months. At the same time, the overall number of prescriptions written and presented increased by 2.4 per cent to a total of just under 214 million compared to just over 208 million for the prior financial year. There were 906 different medicines across 5,380 brands listed on the Pharmaceutical Benefits Scheme at that time.

While I'm not proposing to vote against this legislation, I am challenging this parliament to address the question: if this cost is not covered by the consumer, where will the required revenue come from? Are the ultimate financial beneficiaries of the investment made in our substantial Pharmaceutical Benefits Scheme—that is, the manufacturers who are benefiting from these purchases—giving back to our society through the payment of appropriate company taxes? What we found when my team investigated this sector was that the way the sector currently works is that it appears that, whilst the total income for the pharmaceutical manufacturers with an Australian business number was just over $29.5 billion, only $2 billion of that income was deemed taxable. That's just under seven per cent. On this income, then, just $420 million in tax was paid. That's $420 million in tax against an expenditure of $14 billion by the Australian government. I'm not an accountant, but something here just doesn't seem to add up.

As I said earlier, I'm not challenging or questioning the value of the Pharmaceutical Benefits Scheme for our society, and I would fight to ensure it is maintained and continues to provide for all Australians as needed. In the current economic circumstance, where research shows us that many are finding it harder to juggle the expense of everyday items like medicines, I support the reduction in the co-payment amount for consumers. But, as a pragmatist and on behalf of the people of North Sydney, I would challenge both this government and our parliament to be clear on how it is that we see this program continuing to be funded into the future. We cannot simply shift costs from one column to another and expect Australians not to notice. As this legislation passes through the House, then, I look forward to seeing what must surely follow in quick succession, and that is greater detail on how this government intends to pursue multinationals to ensure they are, in fact, paying their fair share. I commend the bill to the House.

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