Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

It is with regret that I speak today on the National Health Amendment (Pharmaceuticals Benefits) Bill 2014, the regret being that the increased cost of pharmaceuticals is expected to cost Australians more than $1.3 billion over the next four years. This bill increases the Pharmaceutical Benefits Scheme's co-payment for general patients by $5 to $42.70 and for concessional patients by 80c to $6.90 from 1 January 2015. It also increases the concessional PBS safety net threshold by two prescriptions per year and the general safety net threshold by 10 per cent for every year for four years from 2015 to 2018. These extra charges are in addition to the usual increases of CPI and indexation.

As I said at the outset, the bill is expected to cost Australians more than $1.3 billion over the next four years. Labor will oppose this $1.3 billion tax increase on medicines because it will hurt every Australian. Every pensioner, every parent, everyone unemployed, every low-income earner, people with disability, our veterans—no-one escapes this tax. It is yet another impost that this Abbott Liberal government is putting on the cost of living of every Australian. We know that people are already deferring the purchase of prescriptions and some are not having them filled at all. That is not something this government wants to talk about, yet it is the brutal reality for so many people already struggling to make ends meet.

I remind the House that prescriptions are for sick people who need help and need medicine now. The COAG Reform Council report produced in early June this year found that 8.5 per cent of people in the 2012-13 year delayed or did not have prescriptions filled due to cost. In disadvantaged areas, this figure rises to 12.14 per cent, while for Indigenous Australians it is an astounding 36.4 per cent. That 36.4 per cent of Indigenous Australians currently do not have prescriptions filled due to costs is truly alarming. That this bill seeks to increase these costs even further is beyond belief and highlights once again the poor choices and wrong priorities of the Abbott Liberal government. The recent COAG Reform Council report confirmed what many of us have suspected—that the health of Indigenous Australians continues to be poorer than the health of non-Indigenous Australians on most indicators. The council also reported that more than 12 per cent of Indigenous Australians delayed or cancelled a trip to the GP because of cost.

What are the outcomes for Indigenous Australians? Life expectancy at birth is still about 10 years less than for the non-Indigenous population. Lung cancer rates are twice as high, and smoking rates are more than double. Closing the Gap initiatives are making some progress in some health areas but the COAG Reform Council report has warned that the goal to close the life expectancy gap by 2013 is most unlikely to be met. Cost is clearly seen as a determining factor for Indigenous Australians to seek the health care and medicines they need. In response to the proposed introduction of a $7 GP co-payment, Aboriginal and Torres Strait Islander Social Justice Commissioner Mick Gooda noted that Indigenous people currently access Medicare services at a rate which is almost one third lower than what is required on a needs basis and rightly put the argument that Aboriginal and Torres Strait Islander people need encouragement to access medical services, not more barriers.

Make no mistake, this increase to the PBS will be another barrier. Indigenous Australians in my electorate of Newcastle—and more broadly around the country, I might add—are some of the sickest, the poorest and the most marginalised people in our country. Sadly, this government is already cutting primary healthcare services to Newcastle's Aboriginal community, with funding cuts causing the closure of the Awabakal Medical Service's Deadly Choices program that helped young Aboriginal people in my electorate of Newcastle make better health and lifestyle choices. It was a truly great preventative health program that this government saw no value in and walked away from.

On the other hand, the Awabakal Medical Service are not walking away from their people and I would like to take this opportunity to let the House know about the launch of a new health service for Newcastle's Indigenous people that I gratefully attended last week. Awabakal have launched their own mobile health clinic that will be staffed by a full time GP, a midwife, an Aboriginal health worker and a hearing specialist. Their new clinic is a true outreach program that will play a vital role in delivering primary healthcare and education services to the local Indigenous community. Awabakal Medical Services have every right to feel betrayed by this government, but they are doing what they can to keep delivering the best health care to their people. I applaud them for their determination and commitment in the face of no assistance from the Abbott Liberal government.

This bill is being dressed up as a system sustainability measure when in fact it has nothing to do with sustainability or the existing PBS structure. If this were really about the sustainability of the health system this revenue would be going back into the PBS or into Medicare. Instead, the funds raised will be directed to the government's Medical Research Future Fund for some time in the future. Do not get me wrong, I am a big supporter of medical research and the work our Australians scientists do. I am proud to host a number of world-leading scientists in my electorate of Newcastle who work out of the University of Newcastle and the Hunter Medical Research Institute. They deliver outstanding results in their key research areas of brain and mental health, cancer, cardiovascular health, pregnancy and reproduction, and immunity, vaccines and asthma. Scientists like Professor Phil Hansbro—who is leading the way in the race to develop urgently needed treatments for airway inflammation disorders like asthma—are making ground-breaking discoveries. But not once have the scientific research community asked for their funding to be sourced by taxing the sick and the poor. Governments have always found a way to fund medical research in the past and have seen the value of directly investing in medical research without taxing the poor and the sick. These PBS changes and the GP tax are not measures of sustainability; they are part of a longstanding ideological campaign to get rid of Australia's universal healthcare scheme, and to create a two-tiered, user-pays system where your bank balance determines the health care you will receive.

The PBS is growing, but it is growing in a sustainable way and at a much slower rate than was expected. The reason that this has happened is no accident: it is because of the measures Labor took—measures, I might add, opposed by and campaigned furiously against by those opposite—to make the PBS sustainable without punishing patients. The PBS price disclosure reforms, overseen by Labor during two terms of government, have ensured that the PBS is sustainable and has delivered billions of dollars in savings. At the moment the government spends around $9 billion per year on the PBS. Accelerated price disclosure has slowed the real rate of PBS growth and has put the PBS on a sustainable footing. In Labor's last budget, there were changes that were expected to deliver more than $1.8 billion in savings. Taking the package announced in 2007 through to 2017-18, the savings will be closer to $20 billion. At present the PBS safety net threshold for general patients is $1,421. Once the PBS safety net is reached, general patients only pay $6 per script. For concessional patients, the PBS safety net threshold is $360, and concessional patients pay no additional out-of-pocket costs for medicines once the safety net is reached. But this bill proposes to increase the PBS safety net by 10 per cent, plus an annual CPI indexation on 1 January each year. This bill's proposals for increases in the PBS safety net will mean that we end up with more expensive medicines for the most vulnerable people in the community—those that are physically and financially challenged—at the same time as we are pulling the safety net further and further away from those who rely upon it.

The condemnation of this government's plan to destroy universal healthcare is widespread. Residents in my electorate of Newcastle are adding their voices to the thousands across the nation which are opposed to these cruel cuts to health funding, to the increase to the PBS and to the new GP tax. In late June, I joined 500 Novocastrians who voiced their concerns about this government's plan to destroy universal health care. The shadow assistant health minister and my Hunter Labor colleagues, the member for Shortland and the member for Charlton, joined me at the 'Save Medicare' rally, where we heard from those who will be hit hardest by the cruel GP tax—pensioners, families and low-income earners. For many there, this was the first rally they had ever attended. This included a woman of more than 80 years of age. These were not radicals or serial protesters; they were members of the general community who are concerned about their future, and the future of our healthcare system, under this government.

At that rally we also heard from a Registered Nurse who works at Newcastle's John Hunter Hospital. He shares the concerns of other health professionals and peak bodies, who believe that the cost impost posed by visiting a GP will be a double whammy for hospital emergency departments, which are looking at longer wait times, more people attending their emergency centres to avoid the GP tax, and more sick people whose health will deteriorate as they avoid seeing their GP. Interestingly, another attendee at the event who did not speak to the assembly but spoke to the media after the event, about his opposition to the GP tax and its effect on Australians' health, was a New South Wales Liberal state member. When asked about his thoughts on the GP tax, the New South Wales Liberal state member for Swansea, Garry Edwards, said: 'Ideologically, I'm not in favour of this and, quite frankly, I think I speak on behalf of my electorate and my community; the majority of the community don't agree with it either'. I think that the community of Swansea is not alone. I do not think there is one community in Australia that believes this new tax is fair. I would suggest that the state Liberal member for Swansea might want to have a chat to some of his federal Liberal colleagues here in this place. If only those on the other side of this House had the nerve to speak out on behalf of their communities against these cruel hits to Australians, we would have seen more than five speakers from the government side listed to speak on this important bill before the House today.

It is not just Labor who thinks that these changes to the PBS are a bad idea, it is the experts and advocacy groups as well. The Pharmacy Guild of Australia has criticised the increase in the cost of medicines for consumers and has argued that it will be particularly hard on the elderly, in light of the other social security changes being made. The Consumers Health Forum has expressed grave concerns about the growing out-of-pocket expenses for Australians in health care. Michael Moore, the CEO of the Public Health Association of Australia, has stated that the measures are inequitable and will affect society's most vulnerable members. He argues that 'the people to whom this is most important are the vulnerable, such as Aboriginals and Torres Strait Islanders, people from low socio-economic backgrounds or from non-English speaking backgrounds, and the elderly.'

This government will leave a legacy that most would be ashamed to leave. Perhaps that is why we see such a lack of members opposite speaking in this debate. Their names, however, will be marked in the Hansard as having supported these cruel cuts and taxes. And then their absence today will be all the more notable: they had an opportunity to defend the health of their communities—but they were missing in action.

Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

The astonishing thing about the bill we are discussing today, the National Health Amendment (Pharmaceutical Benefits) Bill 2014, is that it absolutely flies in the face of logic. It assumes that a saving made today, in the health area, will automatically lead to a saving tomorrow. Yet we all know that when it comes to health, the earlier we act on our health, the cheaper it is in the long run. And by cutting health assistance at the early stages of a person's illness, we quite often increase health costs, not decrease them.

Every January, my Chinese, Vietnamese and Korean communities wish me a happy New Year. They say to me and my community that they wish us health, wealth and prosperity. Health, not fitness; wealth, not riches; and prosperity, in this greeting, means family and community that sustains you in the bad times and with whom you share the good times. There is great wisdom in that greeting. They are the things that lead to a good life. You can talk about the three of them in exactly the same context. You build them with good habits and you lose them with bad. You can save them up. You can accumulate health, such as a good immune system. You can accumulate friendships that are strong. You can accumulate wealth. They can sustain you in the bad times. You can spend them or you can lose them through an accident, like figuratively being hit by a freight train of tragedy. They are the things that sustain a good life. Each of them is accumulated by good habits every day. In the case of all three, the earlier you build them, the cheaper it is to build them. It is cheaper to build savings for retirement if you invest early. It is cheaper to be healthy if you invest in health early in your life. You build far stronger relationships if you put that work in early.

It is almost universally true that what is best for the patient is cheaper for the taxpayer. It is almost universally true that it is better to immunise so that people do not get sick. Doing that is cheaper for the taxpayer. Early intervention is cheaper than late intervention. Keeping a person healthy is better than treating them for an illness. What is best for the patient is almost universally cheaper for the taxpayer. Yet we have a government that, in this budget, are cutting support for the early stages of health treatment. The GP tax, for example, is likely to dramatically affect the number of people who go to the doctor for health checks. Pathology will attract an additional cost. There will be fewer people taking the regular blood tests that they should take, particularly as they get older, even though it is cheaper for the taxpayer if they take them. Radiology will incur an extra cost, so that things like mammograms will cost more for people who are not on the priority list. Going to the doctor to get a referral will cost more. Fewer people will do all that, even though it is cheaper for the taxpayer and better for the patient if they do that early.

This bill will increase the pharmaceutical benefits scheme co-payment for general patients by $5 to $42.70 and by 80c to $6.90 for concessional patients from 1 January 2015. It will also increase the concessional safety net threshold by two prescriptions a year and the general safety net threshold by 10 per cent each year for four years. It will also dramatically increase the cost of medicines. We all know that the medicines people take early in the onset of an illness or that keep them from infection dramatically reduce later health costs. This is a government who fundamentally do not understand that early intervention in primary health care dramatically decreases the cost to the taxpayer and improves health outcomes for the patient.

When it comes to health, it is true that a stitch in time saves nine. It is absolutely true that, when it comes to health, early intervention is best for the patient and absolutely cheaper for the taxpayer. We have heard the Treasurer speak at length in an incredibly loud tone, as he usually does, saying that Labor introduced a co-payment. It is true that we increased the PBS co-payment in 1986 and that we were the first to introduce a PBS co-payment for pensioners in 1991. There are two fundamental flaws in the Treasurer's argument. Firstly, he makes the assumption that if one side of politics introduces a co-payment it is okay to increase it exponentially, because any subsequent increase is the fault of the first people that did it. That is like saying that whoever first invented tax is to blame if the government increases the lowest tax rate to 60 per cent. It is a nonsense argument. Secondly, and more importantly, he totally ignores the context in which the Labor government made that change and the compensation that it introduced for lower income earners in order to compensate them for the increase in costs. We did not increase a co-payment as part of ripping away money from primary health care and early stage intervention. We did not do that in the way that this government is doing it. This government is increasing the cost of primary and early stage care for people. It is taking that money out of primary care and moving it elsewhere. In other words, they are weakening our health system by making these changes.

Labor introduced a PBS co-payment in 1986 in order to move money within the Pharmaceutical Benefits Scheme, from one area to another. It was about increasing the range of drugs. It was done in the context of very strong negotiations, which Labor has always done, to increase access to pharmaceutical benefits, never to decrease it. That is a fundamental difference between the two actions. The Labor government made changes to the PBS to make it sustainable, which is what the government claims to have done. But Labor moved the money from one area to another and increased the range of drugs that were available. The government is simply pulling the money out of the Pharmaceutical Benefits Scheme. It is cutting the assistance available for people who need medicines in the treatment of their illness or to maintain a lifestyle of relative health. We did not make that change in the context of ripping more than $50 billion out of hospitals, as this government is doing. They remove money from primary care, making it more likely that people will be ill down the track, then they rip the money out of the very hospitals that those sick people will need. It defies logic that you would make it more likely that people will need help further down the track and then reduce the availability of that help.

We did not do it in the context of the GP tax and raising the prices for basic X-rays and pathology. We did not do it in that context. In fact, as I said, we did it in a context of improving access to medicines, not reducing it. We did not do it in a context of cutting pensions and family payments that will see pensioners and families between $4,000 and $6,000 worse off, scrapping senior concessions or raising the tax on petrol. We did not do that. Ours was a modest impost designed to increase access; theirs is one to cut the health budget and move that money into their other priorities of paid parental leave, abolishing the mining tax et cetera. Their priorities are really clear here. It is not about health. Their priorities are absolutely in other areas.

The other thing is that when we introduced the co-payment on the PBS we increased the pharmaceutical allowance so that concession holders received the equivalent of the cost of a script per week to compensate them. We did not leave the people who are most vulnerable out in the cold, as this government has in almost every element of its budget. We did not do that. Being a Labor government, we naturally moved to ensure that the lowest paid people in our community received the health care they needed by increasing the pharmaceutical allowance so that concession holders received a payment the equivalent of the cost of a script per week to compensate them. Every time the PBS co-payment went up, the pharmaceutical allowance went up as well. It was John Howard who broke that nexus in 1997.

So when the Treasurer talks about the history of the PBS co-payment he is being a little bit naughty, shall we say.

Opposition Member:

An opposition member interjecting—

Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

I hear laughter at that. It was an understatement; that is true. He overstates the effect of the PBS co-payment because he ignores the compensation that was given. He also ignores the context and the rationale for it.

This is a bad law, basically. It is a health amendment. One would expect that a health amendment from any government would actually be about improving access to health services; this one does not do that. In fact, it increases the cost of pharmaceuticals. It does not compensate the low paid for the increased cost. It will, over time, probably lead to an increase in health costs.

I would like to finish by repeating once again the basic principle that should underpin any health policy, which is that the ultimate way to save on health costs for the taxpayer is to make sure that our population remains as healthy as possible. The best way to do that is to increase support and effort at the early stages of an illness or in keeping people healthy in the first place. Policies such as this one and the GP tax that discourage people from taking those early steps of seeing a doctor and taking early action should be avoided at all costs because not only are they bad for patients but they are inevitably more expensive in the long run for the taxpayer. I reject this bill absolutely. It flies in the face of all logic.

Bernie Ripoll (Oxley, Australian Labor Party, Shadow Minister Assisting the Leader for Small Business) Share this | Link to this | Hansard source

I rise to speak on the National Health Amendment (Pharmaceutical Benefits) Bill 2014. This is a bad bill. Let's not mince words. Let's not pretend we do not know what this bill is about. It is a bad bill. It is a bad bill that will hit the most vulnerable in our community—the sick and the poorest. It does this unfairly. It is disproportionate. It is not within the context of what the government should be doing for sustainability of the PBS. In fact, all of the arguments the government has put forward for the rationale behind what it is doing are just baseless. They are excuses and baseless arguments about trying to raise more funds from some of the poorest and sickest people in the community—those least able to afford the changes that the government is putting forward.

This bill increases the Pharmaceutical Benefits Scheme co-payment for general patients by $5, which is an enormous slug. On its own, $5 does not sound like a lot. But when you add it to all of the other costs for people who are the most vulnerable and need to use our world-class, world-standard PBS then it is a lot of money. This government wants to slug general patients an extra $5 to take it to $42.70 and concession holders an extra 80c to take it to $6.90 from 1 January next year. It also wants to increase the concessional PBS safety net threshold by two prescriptions per year and the general safety net threshold by 10 per cent each year for four years from 2015 to 2018. These additions are in addition to the usual increases of CPI indexation. If you take that all as a package, this is the damage that this bill will do.

How do you quantify what damage it will do to people's hip pocket and the family budget when they are sitting down and trying to work out whether they can get some medicines or not? People actually make economic decisions on the health, and they should not. We have, and should have, a very strong, sustainable, fair system in Australia, whether it is the Medicare system put in place by Labor or the Pharmaceutical Benefits Scheme—again, put in place by Labor and strengthened by Labor, not weakened. What impact will this have? This bill is expected to raise over $1.3 billion over four years. That $1.3 billion comes out of sick people's pockets. This is the point to be made. This is where the money is coming from. The government wants to raise $1.3 billion but where is it getting this money? It claims that there is a budget emergency, which I will deal with as well. It is getting that $1.3 billion out of the pockets of sick people, often the people who are least able to afford that extra expense.

The government could come in and say, 'That is the case, and we are going to justify what we are doing. There is a budget emergency and that money will go towards fixing the budget.' We hear every day this cover of a budget emergency. As long as they say 'budget emergency', they can do anything they like. So you would expect that the $1.3 billion would go a long way towards fixing this fictional and ghostlike so-called budget emergency that they have constructed. But guess what? It does not. It does not go towards that—not one dollar. The $1.3 billion does not go to any budget measure. In fact, it goes off to a medical research future fund. Noble as that may be, and nice as it may be in the future, why should the sick people of today be funding a medical research fund into the future. If the government wants to establish a medical research fund, that is good. It is a noble cause. But it should do it not out of the pockets of the sick.

Labor will be opposing this $1.3 billion new increase in medicines, which will hurt every Australian. We will be opposing it because it is a new tax, yet another broken promise. We heard ad nauseam the three-word slogan 'No new taxes' and a whole range of other things such as that in government Tony Abbott will keep his promises—I am trying to find one he has kept. This is a government that says one thing before an election and does another thing after the election. People were not expecting and were not told, and I think they really are shocked by this broken promise of a new $1.3 billion tax slug for their medicines on top of all the other extra costs, on top of all the other things this government is doing. So we will be opposing this very unfair measure that hurts Australians.

The Council of Australian Governments' Reform Council report that was released in early June found that 8.5 per cent of people in 2012-13 delayed or did not fill in their prescriptions due to cost. In disadvantaged areas this figure is even higher, at 12.4 per cent, and for Indigenous people it is as high as 36.5 per cent. These numbers are too high for people who need every assistance to be able to afford their medicines, often very much essential medicines. In fact, in 2005, the last time a Liberal government increased the tax on prescriptions for some essential medicines, the usage fell by 11 per cent. There is the rub. That is what this is about. This government is not only increasing the cost, ripping $1.3 billion out of people's family budgets, but also sending out a very strong price signal to the sick, which is, 'We are going to make it more expensive and more difficult for you to access medicines.' In some cases they are essential medicines. The government knows that some people will delay or defer their purchase of those medicines or not purchase them at all. That is simply just wrong.

We have a good strong PBS system in this country that, despite what the government tells people, is sustainable and is working in accordance with what it should be doing, which is keeping Australians healthy, able to continue to work and be productive in our economy, and able to continue to live good lives. If this really were about the sustainability of the health system, then the revenue would simply be going back to the health system, or back to the budget, or doing something a bit more than just a lofty ideal about a medical research endowment fund into the future, which will not deliver for many years to come.

I am sad to say this, because it should never be the case when it comes to health, but it is very clear from the changes being put forward that this is part of any ideological campaign to get rid of Australia's universal healthcare system and create a two-tiered user-pays system. You might think that that is an outrageous claim. How could that be possible? I think the Liberal government is long and loud on the record about its views on Medicare, the PBS and having a universal healthcare system. It is long on the record about wanting to kill it, get rid of it, stab it in the belly—just cut it and rip it away. But they learnt a lesson a little while ago. The Australian people do not support them on that view. The Australian people actually do not think it is a good idea. Australians actually like and enjoy our system. They think we have one of the best pharmaceutical benefits schemes and Medicare systems in the world, where, regardless of who you are, your status in life, your income or where you are, you get access to the best possible medical care you can get, and you get it at an affordable price.

It is not as if it is free. The government says that people cannot expect anything for free. It is not free. Let's get this absolutely clear: every Australian pays for our Medicare system and our Pharmaceutical Benefits Scheme. We all pay. We pay through our Medicare levy, some of us pay a Medicare levy surcharge, and some of us pay for full private health cover as well. It is not free at all. Australians already pay. What we are saying is that they should not have to pay more. There already is enough in the system. If the argument from the government is simply one about not being able to afford it, they are just wrong, because we can, and it is sustainable. The long-term trajectory of the Pharmaceutical Benefits Scheme is one that is sustainable.

This, unfortunately and sadly, is just a deep ideological view that the Liberal Party has on how health care should be provided—who pays for it and how they pay for it. It is much more akin to the often criticised United States medical health system and the problems associated with that, where often people do not get any care at all because they simply cannot afford it, or are forced to sell their home to get medical care. We do not want that in Australia. We do not want to be like the United States or other countries in the world when it comes to provision of good-quality medicines or health care.

We should look to the future and look to strengthen what we have in place—the Pharmaceutical Benefits Scheme, the Medicare system, proper training for our doctors, working closer and closer with the hospital system through the states and territories, and looking at better cooperation and efficiency. These are all the things Labor did when it was in government. It is not easy to do. It is not expected to be fixed overnight or even in a matter of a few short years. It requires a long-term plan and the right intent and motivation, which is to strengthen the system, to cooperate with the states and territories and to find answers to the complex problems of administration and costs within our health system. There is a way forward. This government has taken a very different approach. This Liberal government has learnt its lesson in only one aspect: that it cannot openly and honestly tell the Australian people what it wants to do to either the PBS or Medicare. It has changed its language but it just has not changed its ideology. It has changed the approach but has not changed its motivation. It has changed what it tells people about what it does, but it has not changed what its intentions are and how it will do it.

The evidence is here in this bill, which disproportionately targets sick, the elderly and the vulnerable. We already know through evidence that this will mean that fewer people, some of whom will need essential medicines, may not get their medicines because of the increased costs. We hear all sorts of excuses from those on the Liberal and Nationals side, who say, 'Labor had put in place a co-contribution payment and that if they did it it is okay if we do it.' The reality is that you have to go back a long way and look at the reasoning and the rationale for it being done and the proper context in which it was done at the time and accepted by the Australian people. We did it in a proper manner and in a manageable way, which meant we continued to have a sustainable and affordable health system. What is being proposed here today and, sadly, what will pass the lower house at least, is retrograde.

Those listening to this debate might think that this is just a Labor member speaking, but some of Australia's most senior doctors have been very loud about this. They have already warned that the changes in Tony Abbott's budget will put Australia's health system back by 50 years. That is what doctors think. Doctors are not happy with this. You would think that if you deferred your views and asked for advice, you would at least listen to what some of Australia's most senior doctors and practitioners have to say. They say that this sets back Australia's health system by 50 years.

The price increase comes off the back of cuts. You are copping it in the neck on the left and the right; you are copping it in the neck twice. There are $80 billion in cuts to Australia's public hospitals, doctor visits and schools. There are great big new taxes on everything. There is a new petrol tax. I do not recall that being a highlighted policy principle before the election. There are cuts to preventive health, to dental health, to Australia's health workforce. Again, you might think it is just Labor that is not happy with this, but I can assure you that the Liberal states have been very loud in their protestations against this. They are saying: 'How can you cut $80 billion out of state health systems and hospitals and not expect to have some sort of adverse impact?' That money will have to come from other places. The states will not be able to afford this. If the federal government cuts away $80 billion over the coming years from the states' hospital systems and schools, the states will have to either provide fewer services or do something else—raise more taxes. The reality is that there will definitely be fewer services because of those unfair, cruel cuts.

This is another cruel ideological policy motivated by all the wrong reasons. The $1.3 billion raised through this slug on ordinary people does not go to fixing any fictional budget emergency. If it did that we could say that at least it is going into the budget. Those opposite would have something they could hang their hat on and say, 'We're doing it for this reason. We know it's tough. We know it's cruel'—which they admit; they know it is tough and cruel. But it does not actually do anything. They are blown out of the water by their cruelty to Australian families, the sick and the elderly. And the money raised does not go anywhere near fixing this fictional budget emergency that we supposedly have. I think this is a really bad bill, really bad policy, from a cruel government, and it should not be supported in the House. (Time expired)

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Link to this | Hansard source

A couple of days before the last election the Prime Minister said that there would be no cuts to education, no cuts to health care, no changes to pensions and no cuts to the ABC or SBS. Well, in the wake of the budget we all know that that is now a complete farce. It was a complete misrepresentation of the truth by the Prime Minister and it was not disclosed to the Australian public prior to the election. Before the election that statement was made. After the election those promises and commitments to the Australian people were clearly broken.

The National Health Amendment (Pharmaceutical Benefits) Bill 2014 is part of that process of breaking a commitment to the Australian people. It is effectively a tax increase on the cost of medicines that unfairly impacts on the most vulnerable in our community. That is the gripe and the opposition that Labor has to this budget: it unfairly targets the most vulnerable in our community by increasing taxes, payments and levies that were not disclosed prior to the election, and, at the same time, it reduces the taxation burden on some of the most profitable sectors of our economy, most notably the mining sector, which will get a tax break if the mining tax is removed. Also, the most wealthy Australians can earn profits of over $100,000 a year as an income based on their superannuation of over $2 million and pay no tax on that. That is the unfair nature of this budget. It targets the most vulnerable—those who can least afford to pay and to bear additional costs—but it lets off those who are most able to shoulder some of the burden when it comes to the sustainability of the fiscal position.

Labor opposes this $1.3 billion tax increase on medicines, which will hit the most vulnerable in our community. The tax increase is in the form of a $5 increase to the general patient co-payment and an 80c increase to the concessional patient co-payment, for concession card holders. This bill also increases the general patient safety net threshold by 10 per cent per year for four years and increases the concessional safety net by two prescriptions per year for four years. This is about chipping away at the universality of our healthcare system, chipping away at the hallmark of a healthcare system that Australians are so proud of, in Medicare. The changes proposed in this bill are part of this government's campaign to undermine the universality of our healthcare system and to create a much more user-pays based system in Australia.

The government will not admit this fact. They say they are about ensuring that the health system is more sustainable in the future. This is not true. If it were, the revenue raised through these measures would be going back into the PBS; the revenue raised from the Medicare co-payment would be going back into the sustainability of Medicare. But it is not—instead, the government is putting this money into the Medical Research Future Fund.

Labor has no opposition to investing in medical research—that is a role that government should properly play within our economy and our community. The problem with this fund is that it will reduce the government's commitment to funding medical research through the National Health and Medical Research Council, the very body that has been established and has bipartisan support to deal with adequate levels of investment in medical research in our community in the future. That is the great shame of what is essentially a political game that is being played through this bill and through the proposed Medicare co-payment.

I wish to make a couple of points about the sustainability of our healthcare system. The government would have us believe that the healthcare system is out of control—that spending is out of control and the system is unsustainable—and that that justifies their making these changes to prescriptions and to introduce a Medicare co-payment. But the facts speak otherwise. The facts are that Australia's public health costs are well within the average bounds of OECD expenditure. Australia spends about 11.5 per cent of its GDP each year on public health; the OECD average of expenditure for governments on public health is 11.3 per cent. Australia is spot on in terms of the average cost of funding public health in our country.

Not only that, recent studies have demonstrated that the Australian system is a very efficient one when it comes to delivering proper health care for our community. A very well researched study was recently published in The Lamp, the journal of the New South Wales nurses' federation. The study was undertaken by The Commonwealth Fund, the very well respected health research body based in Washington in the United States. It looked at and ranked the overall effectiveness, efficiency and health of various healthcare systems throughout the world. It looked at the top 11 healthcare systems in developed countries and included nations such as Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the UK, the US and of course Australia. Australia ranked very well—4th out of the 11 nations—on a series of important indicators, including the effectiveness of care, the safety of care provided to patients and the level of coordination amongst healthcare providers at various levels throughout the healthcare system. Issues related to the cost of access, timeliness of care and efficiency of care were a big part of this study, as were equity and the extent to which the healthcare system promoted healthy living, or preventive health, within a community. Australia ranked in the top five on nearly all of those indicators and overall, as I said earlier, we were ranked No. 4 out of those 11 healthcare systems.

Interestingly, the healthcare system that came last, that was the worst out of the 11, was none other than that of the United States, which we all know is a privatised system—a two-tiered system, if you like. The US system, which this government is no doubt interested in looking at for Australia, ranked worst overall on all the indicators in the study. The No. 1 system, on the indicators in this study, was the United Kingdom's system—the National Health Service—which the citizens of the United Kingdom are rightfully very proud of. They are so proud of it, in fact, that they included it in the opening ceremony of the Olympic Games when they hosted it in 2012. It is a healthcare system that both Conservative and Labour governments have respected and valued and recognised as a great strength of the United Kingdom's democracy. The argument that the Australian healthcare system is becoming unsustainable does not hold water at all. That is why the changes in the bill we are discussing today are unjustified.

The costs of the Pharmaceutical Benefits Scheme are increasing, but they are being managed well and are increasing in a sustainable way. In fact, it has been shown that the PBS is growing at a much slower rate than expected in recent budget updates. At the moment the government spends around $9 billion per year on the Pharmaceutical Benefits Scheme to ensure that Australians have access to subsidised medicines and that the most vulnerable in our community get the necessary care they need. While in government Labor proposed and introduced the accelerated price disclosure scheme, which has slowed the real rate of PBS growth and put the PBS on a sustainable footing. I must point out that, prior to the last election, the Pharmacy Guild of Australia campaigned against accelerated price disclosure and simplified price disclosure. It had petitions in all of the pharmacies throughout Australia saying that this was a great shame for our healthcare system, that it would put pharmacies out of business and that it would ensure that Australians would not get the necessary care and access to the medicines that they needed. It was none other than the opposition of the day, the Abbott government, that were as the greatest cheerleaders for opposition to simplified price disclosure. And what do we find now that they are in government? Suddenly they have had an awakening. Suddenly they now support Labor's program of simplified price disclosure—much to the disappointment, I might add, of the Pharmacy Guild of Australia, which reported in a press release on 28 May this year:

The Pharmacy Guild has expressed disappointment over a response from Health Minister Peter Dutton to its petition on Simplified Price Disclosure (SPD).

I must say to the Pharmacy Guild of Australia: you are not alone. You are not alone in feeling your disappointment in this government in terms of the commitments that were made prior to the election regarding this government's proposals when it came to health care and the provision of adequate pharmaceuticals for Australians throughout this country. As we all know and as I mentioned earlier, prior to the election the Prime Minister gave a commitment that there would be no cuts to health, and once they were elected that commitment was thrown out the door in the first budget.

In Labor's last budget there were changes that were expected to deliver more than $1.8 billion in additional savings to this program through reforms that Labor was introducing. That would have taken the package announced at the 2007 budget through to 2017-18. The savings would have been close to $20 billion. These are savings that this government could have been using to ensure that new drugs or future lifesaving drugs could be listed as quickly as possible once they have been recommended by the Pharmaceutical Benefits Advisory Committee. It is something this government could have done if it were interested in ensuring greater access to more drugs as they come on line and are developed and commercialised—but no. Once again they are interested in slugging Australians through tax increases under the guise of sustainability.

One of the most worrying aspects of this government's increase in taxes on medicine is the fact that it will hit the most vulnerable. In the wake of the government's budget the University of Sydney conducted a study looking at the combined impact of higher co-payments, which it found will hit those 65 and over the hardest. The report's co-author, Clare Bayram, is quoted in The Sydney Morning Herald on 7 July:

The introduction of co-payments won't be shared equally.

…   …   …

It will particularly affect people who need to use more medical and related services, such as older people and those with chronic health conditions.

And these are the people this government has chosen to slog with its higher taxes through the introduction of this bill through the Medicare co-payment.

They do not have the support of the Australian Medical Association, who are also damning of this tax increase. Brian Owler has said the University of Sydney study supports concerns that doctors across Australia have with the measure. He agrees that the study shows that the impacts will be on the most vulnerable within our society. That is why Labor is opposed to this bill. That is why Labor will defend Medicare, the universality of our healthcare system, the efficiency of our healthcare system and the effectiveness of our healthcare system. That is why this bill should be rejected.

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

We saw today an extraordinary dummy spit. We had the Treasurer of this country come in here and basically threaten a whole swathe of Australian society that, because he could not get his cuts through, he was going to find other ways to hurt ordinary Australians. Whenever he is under pressure you can tell the Treasurer is feeling it because basically he comes in and does a sook. He will either do it on AM radio or he will do it on the floor of the House.

He is uptight about problems of his own making. The coalition have got themselves to this point. Three quotes demonstrate the problems they have got themselves into. One, they went into an election saying they would not raise taxes, they would not cut any spending other than what they have announced and they would still get to surplus. Magic—supreme sorcery, if you will—that they would be able to get to that point in that way. Two, the Prime Minister expressed that there would be no cuts to health, no cuts to education, no changes to pension, no changes to GST and no cuts to ABC or SBS. The Prime Minister said this on a number of occasions—it was not just a one-off; he said it a number of times. The third quote that has got them into all sorts of trouble is from nearly a year ago. At a doorstop the Prime Minister was asked by the media a specific question:

… the condition of the budget will not be an excuse for breaking promises?

The then opposition leader, now Prime Minister, said:

Exactly right.

They have gone into an election trying to be all things to all people and then come through and devised a budget that has hurt people across the country. When the parliament has said: 'No. We're holding you to account. You made these commitments'—the ones I just read out—'and we're holding you to them,' we then have the spectacle of our nation's Treasurer coming in on the floor of the parliament today and carrying out one of the biggest dummy spits we have seen in a long time.

They got themselves into this hole, but the problem is they want ordinary Australians to pay for it. If you want any clearer example of the type of pain they want to inflict on people, look at what they are doing in health. Look at what they are doing with this bill, which is nothing more than a $1.3 billion tax slug on ordinary Australians, in the context of everything they are doing in health.

This is not a plan to manage health care into the future; it is a plan to do two things. One is clearly to savage expenditure. They clearly just want to take a blunt stick and beat that expenditure down. The second is one that we need to put more and more of a spotlight on: a radical reshaping of the federation.

The longer term game plan is that the government will vacate from what the Commonwealth is doing now. In the future, it will force all the obligations onto the states and territories and it will not be there in terms of trying to provide a national response. We will have, at least on key policy areas like health, a uniform standard. Regardless of where you live in this country, the excuse that because you live in a rural and regional area you should get a second-rate health scheme and that the only way to get better health outcomes is move to the city is, frankly, unacceptable in this day and age.

There is no healthcare plan behind what they are doing. There are two big things that are going to impact on health. One is the ageing of the population, as has been well documented by former Treasurer Costello and through the Intergenerational report. The fact of the matter is that that will always put more pressure on healthcare budgets across the country, regardless of government. The second is lifestyle issues, and we see that in our community all the time. We have conditions that are triggered by the way we live in terms of how much we exercise, how much we eat and what that does to our longer term health. There is a reason for this. If you look at most prosperous nations you will see higher levels of obesity and diabetes. In my area, the other concern is heart disease. There are also the things that come through indulging in excessive alcohol, smoking and tobacco consumption.

These things will have a longer term impact. They cannot be dealt with overnight. We have been trying to get people to consider the need to invest in things like preventative health care rather than think they can pop a pill and that is going to sort them out. Let us look at the way that the government has addressed health care in this budget. It has done two things. As I have said previously, we have a health minister who thinks his biggest job is to stop people from going to the doctor. But this bill will stop people from not only going to the doctor but also buying medicine. That may seem to those in the gallery like a rather extreme statement, but I say that because we have already had studies that have looked at the consumer behaviour, the behaviour of the general public, if you increase the price of medicines.

The COAG Reform Council report that was released in early June looked at this. It said that 8.5 per cent of people in 2012-13 delayed or did not fill their prescription due to cost. For disadvantaged areas, some of which I represent in this place, the figure is 12.4 per cent, and for Indigenous people it is 36.4 per cent. That is recent evidence. Is this a one-off? The answer is no. When you look at the evidence over a longer period of time, you see a replication of the type of experience that I just outlined. For example, the last time the coalition were in power they increased the tax on medicines. When they did this in 2005, the prescriptions for some essential medicines fell by as much as 11 per cent. So you can clearly see that, if you increase the price of medicines, people act in a certain way.

As I said, the answer is not to stop people from going to the doctor and to stop them taking their medicines, it is to find a way to stop them having to go to the doctor and having to get medicines. The way to do it is to encourage people to see their GP sooner and to determine what preventative mechanisms can be put in place. The doctors in the electorate I represent tell me all the time about the types of things that they are doing to address the top three issues that, in their mind, they need to attend to: obesity, diabetes and heart disease. You can rope all those three lifestyle related conditions into one. Some are obviously genetic—your DNA will play havoc sometimes and you might get heart disease quicker than others—but, generally speaking, there are other things that you could do differently to avoid or minimise risk. Being able to go to a GP and have a GP put a preventative healthcare plan in place for you and to attend to those issues quicker will help us longer term.

Obviously, with the ageing of the population, you cannot avoid that demographic wave—that is going to hit no matter what—but there are things that you can do in your middle years or even earlier that can prevent a greater variation in the impact in your later years. Being able to see a doctor sooner makes a difference. What has the response of this government been? To try and stop you from seeing a doctor sooner by putting in this co-payment, this GP tax, as we call it. They claim that the money they are going to raise from that will be put into a medical research fund, which I think is a disgraceful move, frankly. I will never be convinced of the value or the merit of this move because all it does is slug the sick of today to pay for the sick of tomorrow. It is completely unacceptable. They are going down that path.

I and other colleagues in the chamber have already reflected on the experience in our electorates where medical clinics are sending out SMSs encouraging people to see the doctor, because people are thinking that this GP tax, this $7 co-payment, has taken effect when, in reality, it will take effect from July next year. They have experienced such a contraction in presentations to clinics that it has caused them great alarm. Those on the other side of the House may think it is great that people are not turning up to a doctor, but people are potentially putting off taking action on the types of preventable conditions that could be dealt with today and shifting the load of that down the track to other generations to pay for. This is particularly the case with men. Men are notorious for not going to see a doctor about any condition that they have and, as a result, it costs them a lot more in terms of their personal wellbeing and in terms of their finances to fix that condition. So the key is to get people to see the doctor sooner, to avoid unnecessarily using medication and to find a way to sidestep the personal and financial cost.

I come back to the point that the government have not been able to demonstrate a rationale from a health perspective about what they are doing. It is a cruel and crude financial response, and it will see us paying more down the track to correct this. As a result, not only at an individual level but also at the state level, these are the types of things they are doing—the type of cuts they are making: $50 billion in cuts to states and territories for health care. The argument from the Prime Minister and others who appear in the House during question time is to say: 'Oh no, health budgets! We are actually increasing spending; it goes up every year,' and they show it. They are increasing health spending at a rate phenomenally lower than was expected by the states and territories. It is so low. If the states and territories were on board with this, why would we have the Premier of New South Wales describe the $50 billion cuts—or the $80 billion cuts, if you include schools—as a 'kick in the guts'? They do not see it. They are not championing an increase in healthcare spending because they know what they were expecting was up here, and what they are now getting is way below—down here. It might be increasing but it is increasing at a rate that is insufficient to deal with the costs they know are coming.

In this parliament, in 2011-12, we dealt with legislation that was part of an overall package of support for states and territories dealing with health care. The concern was that, by 2046, one component of state and territory budgets would overwhelm all others and that would be health care. If we did not find a new way to finance health care in this country, states would spend their entire budget on hospitals and health care. That is why we put the deals in place. This was through COAG. It did not matter what political party, Labor or Liberal, they agreed through COAG; the federal, state and local governments agreed this was the way to go. The only people who opposed it were the coalition at the federal level. Why? Because their political interests were not served by finding a solution. That is what we had there.

Now we have this combination, this melting pot, of issues. We have the GP tax; a $1.3 billion slug through lifting the cost of medicines; and this massive cut to hospital and health care. Does anyone in this place think that this is sustainable—that, through this budget, Australians will not pay the price? Does anyone think we will not pay the price down the track for this? It is abominable to think of what we are doing to future generations' health care, as a result of this first budget alone. We will put people through greater suffering and greater pain, and I mean those terms literally, because of what this government is doing to health care when they promised people—when the Prime Minister on repeated occasions said—'No cuts to health.'

I am not just talking about the cuts they have made in the budget. The Australian people had every reason to believe that when it came to health care, based on what they heard from the Prime Minister, he would not conduct the type of vicious attack we are seeing right now on health care. They were entitled to think that, because he was out there—the champion against the cost of living, 'Captain Fluoro'. Everywhere you saw him he was in a fluoro vest, visiting factories and workplaces and saying he was going to attack the cost of living.

But he never, ever told people that when he got in he would cut hospital funding by $50 billion, that he would introduce this co-payment and that he would lift the cost of medicine. Nowhere did he say that and, as a result, we have this bill before us now. It comes as a shock. It will lift the price of medicines and reduce the safety net, particularly for the most vulnerable. We see this, and all the other things, and we will pay a long-term price for these short-term decisions.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak against the National Health Amendment (Pharmaceuticals Benefit) Bill 2014. This bill increases Pharmaceutical Benefits Scheme co-payments for general patients by $5 to $42.70 and for concessional patients by 80c to $6.90. It also increases the concessional PBS safety net threshold by two prescriptions per year, and the general safety net threshold by 10 per cent each year, for the four years from 2015 to 2018. These increases are in addition to the usual increases of CPI and indexation.

Labor will oppose this $1.3 billion tax grab on medicines because it hurts every Australian. As the member for Chifley and others on this side have pointed out consistently, prior to the last election the now Prime Minister stood in front of the Australian people and said: 'No cuts to education, no cuts to health, no changes to pensions, no change to the GST and no cuts to the ABC or SBS.' He said that on 6 September 2013. The only thing he has not done so far is change the GST but, as we expect from this government and as the Treasurer said, there is more to come. We expect to see that being put on the table next, as they try to fill in the mistakes they made in their election promises.

The Prime Minister was interviewed by Chris Uhlmann on ABC's 7:30 on 8 July 2013. He said: 'We will be a consultative, collegial government. No surprises, no excuses.'

In another interview, when he was asked about the condition of the budget by a reporter who said:

The condition of the budget will not be an excuse for breaking promises?

the now Prime Minister said:

Exactly right. We will keep the commitments that we make. All of these commitments that we make will be commitments that are carefully costed.

What we have seen from this Prime Minister since he came to power has been a total backflip on each and every one of those things. The government have not been consultative. They have not been collegiate. They are full of surprises and full of excuses.

Every single day we hear the same excuses from those opposite, parroting their talking points nonstop: 'Oh, it was a Labor mess.' It was a Labor 'mess' that kept us out of the GFC. It was a Labor 'mess' that kept inflation low. It was a Labor 'mess' that kept unemployment to low rates. All these things have happened. This economy grew and grew during the years of the Rudd and Gillard governments, something this current government cannot say. We have seen some of the worst indicators of public and business confidence ever seen—the fastest drops in consumer confidence ever—in the first six months of this government. We have seen that because this government, which was built on a lie, has come in here and done nothing but cut and attack every Australian.

In their first budget, the Treasurer announced education and health spending would be cut by a total of $80 billion. Pensions will be linked to inflation, rather than wages growth, and therefore will increase at a lower annual rate. In the gospel according to Abbott in Battlelines, 2009, page 133, he said:

Commonwealth spending on health and education now approaches $90 billion a year. Still, any withdrawal of Commonwealth involvement or spending in these areas would rightly be seen as a cop-out.

Well, what a cop-out we have seen under this Prime Minister and this government. The Abbott government is making medicines more expensive by adding $1.26 billion to family budgets. It may not seem a lot but when you put that on with the fuel tax increase and the other increases that have been put in place by this government it does add up. It is all right for those on high incomes, but for those on fixed and low incomes, it is a very, very big burden for them to bear. The Combined Pensioners and Superannuants Association of New South Wales said on 13 May this year:

The message to Australians tonight is: 'if you get sick, you'll pay. If you get old, you'll pay. If you lose your job or acquire a disability, don't expect to get support so easily.'

Sharing the burden is heavily falling on the shoulders of those least able to afford it.

I think that sums up this government and this budget and what they are doing. This is not the only cuts to health. They have also put a tax on doctor visits and there is hundreds of millions of dollars being cut from preventative health, dental health and Australia's health workforce. We have been dealt a major blow from the Abbott government as they pull back from their commitment to increase hospital funding, breaking their promise to index funding to a combination of growth in the consumer price index and population. Labor will not support Tony Abbott's unfair slug on sick Australians.

Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

Order! The member knows that he should be referring to the member by his title. He would certainly be well aware of that.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

We will not support the member for Warringah's unfair slug on Australians that is built on lies before the election.

The role of the PBS scheme is to provide equitable access to medicines that people need when they need them. It will be the sick, particularly those with chronic diseases, rather than pharmaceutical industry that will feel the pain from these budget measures. The COAG Reform Council report released in early June found that 8.5 per cent of people in 2013 delayed or did not fill their prescriptions due to cost. In disadvantaged areas this figure is 12.4 per cent, and for Indigenous people it rises to 36.4 per cent. The last time the Liberal government increased the tax on medicines in 2005, prescriptions for some essential medicines fell by as much as 11 per cent.

I spoke to Mr Kevin Cooper from Kilmore today. He is 82 years old. Unfortunately, he is an Essendon supporter, but apart from that he is a good bloke. He lives in the Dianella Village aged care hostel in Kilmore. Every day for the rest of his life Mr Cooper must take 22 different tablets: 12 tablets for breakfast, one at lunch, two in the afternoon, five for dinner and two before bed. Every day he has to do this. These medicines that keep Mr Cooper alive are already costing him $90 a month. It might not be a lot to you and I, but it is a lot when you are on a pension and most of your money goes to accommodation. Mr Cooper will be one of the many hundreds of thousands of people will be slugged an extra $12 to $15 a month, pushing his prescription costs to well over $110 a month on the piece of pension that he keeps for himself.

Were these changes really about the sustainability of the health system this revenue would be going back into the PBS and into Medicare. But it is not. We know that these changes are part of the Liberal's ideological campaign to get rid of Australia's universal health care scheme—to create a two-tiered scheme where user pays is the principle. The Abbott government must recognise that medicines are not a cost but a critically important investment for better health care for all Australians. As the Medicines Partnership of Australia stated in April this year:

PBS medicines along with the professional advice and support of doctors and pharmacists keep people alive and out of more expensive hospital and residential aged care settings. They keep people productive in the economy, in the paid workforce and caring for family members.

Some of Australia's most senior doctors have already warned that the changes in the Abbott budget will put Australia's health system back over 50 years. Philip Clarke, Professor of Public Health at Melbourne University, said on 2 May this year:

… general co-payments are already quite high by world standards and these are at a level that may discourage use of beneficial medications. They also have the potential to increase downstream costs, for instance, through increased hospitalisations.

For people with concession cards, the current $36.90 co-payment is already quite high by world standards. National Seniors Australia reported that many people with chronic illnesses live in poverty due to their illnesses, with some spending 25 per cent of their income on managing their illnesses. Co-payments to the PBS are a real burden amongst so many other co-payments. Thirty per cent of people between the ages of 50 and 64 report financial strain in the past five years due to the cost of prescription medicines, compared to 13 per cent for those aged 75 plus; 41 per cent of those aged 50 to 64 who face financial strain have sought cheap alternatives; and 18 per cent of those aged between 50 and 64 who face financial strain have not filled their prescriptions.

The PBS works differently from the Medicare benefits scheme. We pay a Medicare levy and high-income earners pay a Medicare levy surcharge. There is no such thing for the PBS. Labor does not support this, especially in the context of taxes this government wants to increase and introduce for doctor visits, pathology and medical imaging. Labor made changes to the PBS in government which has put it on a sustainable footing—what we see today is another unnecessary slug on Australians who already have high out-of-pocket costs—such as the introduction of accelerated price disclosure, which sped up the rate at which the government takes advantage of falls in the marketplace of generic drugs. This has resulted in slowing the real rate of PBS growth over the forward estimates.

The complete nonsense of this government's argument is that if the government's actual intention was for the PBS to be growing in a sustainable way, the government would put the money into the health care system. But it is not. Instead, the government is putting the money into a Medical Research Future Fund. The current Minister for Health sat here for three years and did not ask the question of the health minister in the former parliament. He has refused to guarantee that the government will not shirk on its responsibilities to continue funding medical research in the future through the NHMRC, should it be re-elected. Labor invested unprecedented levels of funding into state-of-the-art medical-research facilities. If you want to fund medical research, you do not do it by taxing sick people and stopping them going to their GP.

In the forward estimates, the PBS is growing slower. The reason this has happened is no accident. It has occurred because of the measures Labor took. They are measures opposed and campaigned against by those opposite, to make the PBS sustainable without punishing the patients. As the Medicines Partnership of Australia pointed out on the 24th April 2014:

PBS expenditure actually fell last financial year and is forecast to rise at a rate lower than GDP growth throughout the current forward estimates, a fact confirmed in Mr Hockey’s latest figures. How it is then suddenly forecast to start increasing by nearly $1billion a year is unexplained.

The PBS price-disclosure reforms overseen by Labor during two terms in government have ensured that the PBS is sustainable and it has delivered billions of dollars in savings. At the moment the government spends around $9 billion per year on the PBS. The accelerated price disclosure has slowed the real rate of PBS growth and put the PBS on a sustainable footing.

In Labor's last budget these changes were expected to deliver more than $1.8 billion in savings. Taking the package announced in 2007 to 2017-18 the savings are closer to $20 billion. These are savings that this government should be using to ensure that the new drugs of the future or lifesaving drugs, such as Kalydeco, are listed as quickly as possible once they have been recommended by the Pharmaceutical Benefits Advisory Council. But that is not what we are seeing with this government.

Consistent with its approach to governing, so far, especially when it comes to health, this government is saying: 'You will pay.' At present, the PBS safety net threshold for general patients is $1,421. Once the PBS safety net is reached, general patients only pay $6 per prescription. For concessional patients, that goes to $360, and they will pay no out-of-pocket cost for medicines once that is reached. PBS safety net family arrangements also apply, where a family can combine PBS amounts to help them meet the safety net sooner.

The bill proposes to increase the PBS safety net by 10 per cent plus CPI indexation on 1 January, each year, from 2015 to 2018. The combined pensioners association, again, when asked about the PBS said:

A 2008 study found that when the Howard Government increased the price of PBS medications for pensioners, pensioners avoided purchasing life-saving medications.

It stands to reason that pensioners will limit their purchase of PBS medications when the co-payment jumps by 13% … This will be aggravated by the increase in the safety-net threshold, which will see a pensioner pay up to $427.80 per year …

This is bad legislation. It is bad legislation by a bad government built on lies. They should be condemned for it.

Terri Butler (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

I oppose the bill, which is one that increases the Pharmaceutical Benefits Scheme co-payment for general patients by $5 to $42.70 and by 80c to $6.90 for concessional patients, from 1 January 2015. The bill also increases the concessional PBS safety net threshold by two prescriptions per year and the general safety net threshold by 10 per cent per year, each year, for four years from 2015 to 2018. The additional fees for PBS co-payments will be in addition to the usual increases for CPI. We are told the bill is expected to raise $1.3 billion over four years and will contribute toward the Medical Research Future Fund that the government announced in its 2014-15 budget.

The opposition opposes the bill. The bill is one that will have a disproportionate effect on those least able to shoulder the burden on this government's cruel budget and its twisted priorities. This is a government, in its budget, that wants to introduce new charges for going to the doctor, new charges for going to imaging services, new charges for pathology and increased charges—as we are seeing in this bill today—for prescriptions.

Part of the reason I wanted to speak on this bill is it really exposes some of the difficulties with the GP tax. We are told it is a $7 tax. We are told that $7 is a small amount of money. Of course, $7 is not a small amount of money for people on lower and middle incomes, particularly for people who might have one or two people sick in the family at one time or for those, like me, who are the parents of young children. I understand the Treasurer said on television a little while ago that it would be unusual for more than one child to be sick at any one time. With respect to the Treasurer, I disagree. I think it would be more unusual if all the kids in the family did not get the cold or flu or pick up the same virus or illness at the same time.

It is obviously a very concerning amount of money, at $7. More to the point, no one should be under any illusion about the Liberal-National government's preparedness to increase co-payments by greater than the CPI. That is what they did with the PBS co-payment increase in 2005 and it is what they are doing now with this bill. They are increasing the co-payment by greater than the CPI. Some of them are not explicitly stated, but the reasons for the co-payment, in each case, is to send a so-called price signal. What is a price signal? It is a signal to people not to go to the doctor. It is a signal to people not to fill a prescription.

The Liberal-National government is implying that people are unnecessarily going to the doctor or are unnecessarily filling prescriptions. In other words, the government is calling Australians hypochondriacs. I do not believe Australians are hypochondriacs and nor should I believe it. There is no evidence to that effect. At the end of Terry Barnes's submission to the Commission of Audit, in which he contended for a co-payment on GP visits, he acknowledged that he did not have any research that indicated Australians were unnecessarily seeing doctors. In many ways, this idea of a price signal is putting the cart before the horse. Surely before a government engages in a reckless policy of dissuading people from seeking medical assistance, that government ought to have evidence that people are unnecessarily seeking medical assistance. If there was such an issue and if the government had that research—and if it did, it would have clearly told us and come clean with the Australian people—then the government would have, if it were responsible and not reckless, created or crafted policy responses to deal with that specific issue rather than have this reckless policy that will see people who are in need of health care not seeking that assistance early or possibly at all. A well-respected academic, Professor Stephen Duckett, a professor of health policy at La Trobe University and a director of the health program at the Grattan Institute, said:

The effects are known: budget savings will be made—over $1b a year—off the backs of the poorest and most vulnerable. People who miss out on the safety net will now miss out on care as well.

That is what Professor Duckett said about the GP co-payment on The Conversation website, which is known to many people in this place.

Those concerns are backed by the evidence and the facts, which is what public policy ought to be based on, instead of ideology and liberal and national ideas that they need to somehow get poor, low- and middle-income people to stop going to the doctor and to stop filling prescriptions. The facts are as follows. The COAG Reform Council report released in early June found that 8.5 per cent of people in 2012-13 delayed or did not fill their prescription due to cost, in disadvantaged areas this figure was 12.4 per cent and for Indigenous people this figure was 36.4 per cent—that is, over one-third of Indigenous people did not fill their prescriptions because of cost.

The last time a Liberal-National government increased the tax on medicines, in 2005, prescriptions for some essential medicines fell by as much as 11 per cent. I am sure academics in Western Australia have been studying very closely what effect price increases have had on prescriptions being filled. We know what can happen when so-called price signals are sent. They have the exact effect that is intended. The intended effect is that people do not fill their prescriptions. The effect of the GP tax, the imaging tax and the blood test tax will be that people will not get that medical help. That is the entire intention of the co-payments.

We hear from the government all this language around sustainability. The money is not going back into Medicare; the money is going to the medical research fund that the government wants to establish. They say this is an improvement to the sustainability of health spending in this country. It is obviously not about revenue into Medicare; it is obviously about expenditure from Medicare—in other words, dissuading Australians from going to the doctor, from getting X-rays, from getting blood tests or, in this case, from filling their prescriptions.

I cannot think of a more reckless policy than a policy that prevents people, that dissuades people and that reduces people's propensity to get medical assistance when they need it. There are enough impediments. There are attitudinal impediments. There are already difficulties in getting people to see doctors and to take their medicine when they need to. We do not need a policy that prevents people from getting medical help. We need a policy to help people get more medical help when they need it and to go to the doctor earlier—not ignore that feeling that something is wrong but actually get themselves checked out. We need to support preventative health measures, but this government wants to abolish the Preventive Health Agency. We need health reform that is aimed at planning the health workforce for the future. We know that there is going to be increasing demand for health workers, yet the government wants to abolish the workforce planning agency.

When it comes to pharmaceuticals, we know that this is a $1.3 billion tax increase on medicines that will hurt every Australian. This is part of a campaign by this government to create a two-tier user-pays health system. Doesn't that work so well in the United States? Aren't they pleased with their health system? The United States is one of only three countries in the OECD where a greater proportion of healthcare costs are borne by private funding sources than by public funding sources. Let us look at what has happened there. Health inflation has risen sharply over the past 30 years, much more sharply than general inflation, and the price of health goods has also risen sharply. Why would we want to follow the lead of a country that spends nearly 18 per cent of its GDP on health care when we spend in the vicinity of nine per cent of GDP on health care? Why would we want to Americanise our health system? The answer is simple: we do not want to Americanise our health system. Australia has a health system that is the envy of the world. The Australian health system is based on the principle of universality—everyone has access to the health care they need.

Yesterday in question time the Minister for Health mentioned that the purpose of bulk-billing was to be a safety net. That betrayed the Minister for Health's fundamental misunderstanding of our health system. Bulk-billing underpins universal health care in Australia. Bulk-billing is an important and fundamental part of our health system. It is not a safety net in a two-tier health system. We do not have a situation in this country yet where your income determines the quality of the health care that you can get. We do not want it to become the case that your income determines the quality of the health care that you get. But this move to increase the PBS co-payment by greater than the CPI, the new tax on GP visits, the new tax on imaging, the new tax on pathology—all of these things are aimed at creating a two-tier health system and aimed at shifting the funding of healthcare costs in this country further towards private sources and away from public sources. This is not something that the Labor Party will support. It is, as I said, a $1.3 billion tax increase on medicines. We will oppose it.

We say that it is not appropriate to ask the sickest Australians to fund this government's medical research foundation. We know it was a hurried policy—the government has admitted as much. We know that just a few weeks before the budget was handed down the policy was created. We also know that it is ill-considered, because it is a policy that robs today's sick to pay for research to help tomorrow's sick. It is a policy that asks the sickest Australians to fund the creation of a medical research foundation. The problem with policy on the run is that, apart from the fundamental difficulties with the policy itself, it does tend to lead to unintended consequences. We have already seen one of the health research bodies warning that it has received a number of communications from donors to say that they were no longer going to contribute to health research in this country because of the establishment of this fund. It is part of the risk of rushing through policy without thinking it through—it is policy that is motivated by ideology, not by evidence or by sound reasoning.

Labor is also concerned that some of Australia's most senior doctors have been speaking out against the Abbott government's co-payment plans. People from diverse sources are worried. In my own electorate I have been visited by health stakeholders, including the Doctors Reform Society, who have expressed grave concern about the changes to the health system. I have had constituents write to me concerned about the new GP tax. Just today I received a message from a constituent, David, on Twitter who said he received a text message from a local health service provider, advising that there was not yet a co-payment on their services. What would motivate a health service provider to send that text message to its patients? Obviously, the co-payment is already having the intended effect of dissuading people from using health services. The health service provider is trying to counteract that effect for their business. We on this side of the House consider it wrong and reckless to put in people's way obstacles to seeking the health care they need.

Tim Watts (Gellibrand, Australian Labor Party) Share this | Link to this | Hansard source

Like the member for Griffith, this is my first time in this House. The last election was my first campaign; I will recall it well for the rest of my life. However, I do not recall during the election campaign seeing the coalition promise that once elected it would increase the price of prescriptions for Australians. I do not recall the coalition, before it was elected, promise that it would introduce a two-tiered medical system in the country. I do not recall the promises to tear up universal health care in Australia. Maybe this was my neglect; maybe this was in a sealed section in the coalition's Real Solutions policy pamphlet. You know those sealed sections in women's magazines, Mr Acting Deputy Speaker, where they keep the obscene bits that you do not want the public to read.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

No, Member for Gellibrand, I don't.

Tim Watts (Gellibrand, Australian Labor Party) Share this | Link to this | Hansard source

I know it does not appeal to you; I know these are not the kind of things you would flip through. Nor are they the kinds of things that interest me.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

I haven't bought a Women's Weekly for months!

Tim Watts (Gellibrand, Australian Labor Party) Share this | Link to this | Hansard source

Perhaps I did miss this during the last election campaign and perhaps the coalition was upfront about its plans to jack up the prices of prescription medicines and to undermine our universal healthcare system. However, I suspect that a more likely explanation is that this bill before us is another example from a litany of broken promises from this government since the May budget.

Labor will oppose the $1.3 billion tax increase on medicine imposed by this bill, because it will hurt every Australian. It is unfair and is another broken promise. There are many reasons for opposing this bill but the one that strikes me the most is the impact of increasing the cost of prescriptions will have on the use of prescription medicines in the community. The COAG Reform Council report, released in early June, found that at present 8.5 per cent of people in 2012-13 delayed or did not fill their prescription due to its cost. In disadvantaged areas like Melbourne's west that I represent, the figure was 12.4 per cent and for Indigenous people it was an extraordinary 36.4 per cent. If this bill does manage to pass, we can expect that these rates to increase even more. Call me a revolutionary, but I believe that people respond to price incentives. This may be foreign to the coalition government, which does not want a price signal or incentive for polluters, though a price signal for sick Australians does seem to attract the support of the Prime Minister.

It is important when we are talking about the PBS that we understand they are not just medications for the common cold. Drugs under the Pharmaceutical Benefits Scheme are required to help people to live a functional life. The last time a coalition government increased the tax on medicines in 2005, the number of prescriptions for some 'essential' medicines fell by as much as 11 per cent. These medications were prescribed by GPs as necessary for their patients' lives but were foregone because of their cost. We on this side of the House will do everything we can to ensure that this does not happen again. That is why we are opposing this bill in the House.

If this bill was really about the sustainability of the healthcare system, the revenue raised from these increases in the prices of prescription medicines would be returned into the PBS or into Medicare or into the Australian healthcare system. So far, however, the government has shown no interest in improving the lives of Australians experienced through the healthcare system. In fact, these changes are part of an ideological campaign to get rid of Australia's universal healthcare scheme and create a two-tiered user-pays system. As the member for Griffith indicated earlier, this is part of a concerted policy from the government to Americanise our healthcare system, in the same way that they are trying to Americanise our higher-education system and in the same way that, if they got their druthers, they would try to Americanise our industrial relations system. The vision for this country held by those opposite is very different to the one held on this side of the House. We believe in a fair go. We believe in a compact between the voters and the government that we will live in a civilised society, not a dog-eat-dog user-pays system.

Australia's universal healthcare system means a lot to my constituents in Gellibrand, and it is part of this fair go. We believe in this compact that we will live in a civilised society where everyone has access to affordable, high-quality health care, regardless of their means. This is why we will not be supporting this government's unfair slug on sick Australians that has been built on the fibs, falsehoods, fictions and fabrications told by those opposite before the last election. Must we remind those opposite, yet again, of the promises the Prime Minister made before the last election: 'no cuts to education, no cuts to health, no changes to pensions, no change to the GST, and no cuts to the ABC or SBS'—and, a personal favourite of mine, 'What you'll get under us are tax cuts, with no new taxes'? In fact, the Prime Minister went so far as to say, on the Today program, that reducing taxes was his 'very reason for being in politics'. Yet I have lost count of the number of bills since the May budget that I have spoken on in this chamber in which this government is increasing the cost to Australians—increasing taxes.

At the same time that the government is increasing taxes it is cutting funding to education, cutting funding to health, changing the pension, goading the states into calling for an increase in the GST, cutting funding for the public broadcaster and introducing a new $7 tax every time you go to the GP and is now trying to push through this increase in the price of prescription medications. Where is the Prime Minister's respect for the Australian people? How can the Australian people ever trust this Prime Minister again, when he has broken so many promises in such a short period of time?

But you need not take the word of those of us on this side of the House about the impacts this bill will have on Australians. All you need to do is listen to the experts. Australia's most senior health experts have already warned that this government's budget will put Australia's healthcare system back more than 50 years. Philip Clarke, Professor of Public Health at the University of Melbourne, recently wrote:

Clearly, it is consumers, particularly those with chronic diseases, … that will feel the pain from these budget measures.

We on this side of the House are listening to experts like Mr Clarke, and after listening to his analysis and many others in the sector we cannot support a bill as unfair as the one currently before us.

The proposed price increases in this bill come off the back of cuts already made by this government to the healthcare sector—cuts they promised before the last election that they would not be making. So far the government has conceded that it will slash $1.8 billion from Australia's public hospitals, including public hospitals in my electorate and, as part of the Western Health network, Williamstown Hospital, Sunshine Hospital and Western hospital in Footscray, and will introduce a new $7 tax on doctor visits—a $7 tax that you can be sure will become $15 in short order, as recommended by the Commission of Audit, the ideological priesthood of this coalition government. We have seen already from those opposite proposed cuts of hundreds of millions of dollars to preventive health, dental health and Australia's health workforce. It is extraordinary, as the member for Gellibrand coming into this House, seeing that those opposite do not support preventive health in our community. My predecessor in this seat championed many worthy preventive health initiatives and I can only speculate as to why those opposite are so hostile to preventive health. It may be that the Institute of Public Affairs' list of items for the government to get out of the way, once it was elected, to be more radical than Whitlam, had seven items relating to the repeal of preventive health measures. Why is the IPA hostile to preventive health measures? Why would the IPA not want us doing something about tobacco? Why would the IPA not want us doing something about big alcohol, about big food? I leave that question in the ether, but because the IPA does not disclose its funding sources we could not infer that these positions were taken as a result of their political donors. So I do not make that inference here today, but if they did disclose it then maybe we would have an explanation for this mystery.

It is important to recognise here that the PBS works differently from the MBS. High-income earners pay a Medicare levy surcharge to support the MBS. This is not the case for the PBS. Labor does not support this, especially in the context of the other draconian measures this government has proposed as part of its budget of broken promises—in particular, the taxes it wants to increase and introduce for doctor visits, pathology and medical imaging.

The government has tried to point the finger at Labor in this debate and claim that we too made changes to the PBS. The point, however, is that the changes made by Labor in government would have put the PBS on a sustainable footing—reinvesting in the scheme to improve accessibility to a wider range of medicines. The changes in this bill are an unnecessary slug on Australians, who already have very high out-of-pocket costs. The government is desperately trying to find new sources of revenue without thinking about the effects such changes will have on people in the community, particularly the vulnerable. If the government was actually trying to put the PBS on a sustainable path, it would be reinvesting the money raised by these increase back into the scheme. However, it is not. Instead, the government is putting money into the Medical Research Future Fund. The minister has refused to guarantee that this fund will not see the government shirking its responsibilities to continue funding medical research in the future through the National Health and Medical Research Council, should it be re-elected. It is an extraordinary proposition: to tax today's sick in order to search for a cure for tomorrow's ill.

The PBS is currently operating on a sustainable basis. In fact, the PBS is growing at a much slower rate than expected, and recent budget updates have shown that the PBS is growing at a slower rate than it was expected to. This has not happened accidentally; it has come about because of a number of measures Labor took in government, measures that where opposed and campaigned against by the Prime Minister and those opposite. Labor's work, including the price disclosure reforms, made the PBS sustainable without punishing patients.

The current bill before the House punishes patients beyond belief. At the moment, the government spends around $9 billion per year on the PBS. Accelerated price disclosure has slowed the real rate of PBS growth and put the PBS on the necessary maintainable long-term footing. In Labor's last budget, there were changes that were expected to deliver more than $1.8 billion in savings. Over the years from 2007 to 2017-18, the savings were close to $20 billion. These are savings that the government should be using to ensure that the new drugs of the future, or lifesaving drugs, are listed as quickly as possible once they have been recommended by the Pharmaceutical Benefits Advisory Council. But that is not what we are seeing from this government. Consistent with its approach to governing so far, especially when it comes to health, this government is saying, 'You pay or you go without.'

At present, the PBS safety net threshold for general patients is $1,421. Once the PBS safety net is reached, general patients only pay $6 for each prescription. For concessional patients, the PBS safety net is $360 and concessional patients pay no additional out-of pocket costs for medicines once the safety net is reached. PBS safety net family arrangements also apply, whereby a family can combine PBS amounts, which can mean that at present families meet the safety net sooner. For PBS safety net purposes, a family comprises a couple legally married and not separated, with or without dependent children; a couple in a de facto relationship, with or without dependent children; or a single person with dependent children.

This bill proposes to increase the PBS safety net, on 1 January each year from 2015 to 2018, by 10 per cent plus an amount based on annual CPI indexation. From 1 January 2019, the government states that only CPI indexation will apply, but it is fair to be sceptical of the government's promise here given that it has broken every promise it has made when it comes to health care so far. In addition to increasing the PBS safety net for general patients, this bill proposes to increase the PBS safety net for concessional patients. This bill proposes to increase the concessional PBS safety net by two prescriptions each year from 1 January 2015 to 2018. Not only will medicines become more expensive, but for the most vulnerable—because that is what the safety net is there for, to protect Australians who are in a very vulnerable situation—the safety net to help them is further and further away.

In my electorate of Gellibrand, I recently visited the Williamstown emergency relief centre. After speaking to a number of people on the day, one thing became abundantly clear: many people in our community are already struggling to keep their head above water. With the cost of living continuing to rise, the current cost of medication is something many of these people already struggle with. Slugging them with a tax on their medicines will only make their lives even harder. They do not need that added cost, especially when many of those medicines are for life-saving purposes. It is the government's duty to help people like those who rely on the relief centre in Williamstown. We should be supporting them, not punishing them.

To conclude, I think it is important to highlight the objective set out in the National Medicines Policy, which the PBS comes under. The National Medicines Policy aims to achieve positive health outcomes for all Australians through access to and wise use of medicines. It is difficult to see how the bill before the House conforms with these objectives. This bill is, at the highest level, yet another example of how the coalition is attempting to change our country, attempting to turn our country into a dog-eat-dog society where the basic, fundamental tenets of the fair go that we have relied on over the last 40 years are thrown out the window. It is unsurprising those opposite did not bring the Australian people in on this plan before the last election. It is quite clear that, in my electorate, people did not vote for these changes—and they do not want them. I assure all those in this House that Labor will fight these changes both here and in the other place.

Amanda Rishworth (Kingston, Australian Labor Party, Shadow Parliamentary Secretary for Health) Share this | Link to this | Hansard source

The National Health Amendment (Pharmaceutical Benefits) Bill 2014 is just one of many bills before the House attacking our universal healthcare system. What we have seen in this budget of broken promises is a cost-shift from government to ordinary people—aimed at pricing them out of the healthcare system. The proposed GP tax would spell the end of universal health care. I have spoken many times in this place about the extra expense that the GP tax will impose on people. In my community, many people are very confused. When I tell them—they did not realise this; they thought the $7 GP tax was bad enough—that they will have to pay the tax on X-rays, on blood tests and on similar services, they are quite clearly shocked. Then, on top of that, I have to tell them about the government's proposal to significantly increase the cost of medicines as well. If you are thinking of visiting the doctor, getting a blood test, going back to the doctor to get a prescription and then getting that prescription filled, you will have to pay the government's new taxes at each step. So these budget measures will end up taking many dollars out of your pocket. I think that is very concerning.

Labor will oppose this $1.3 billion tax increase on medicines—because it will hurt every Australian. There are many people who delay filling, or who do not fill, their prescriptions because of the cost. It is important to recognise that deterring people from getting essential medicines is a significant issue. When the Liberal government increased the tax on medicines in 2005, sales of some essential medicines fell by as much as 11 per cent. That means that people were not going in and getting their prescriptions filled—even though these medicines were essential medicines—because they just could not afford it.

The Minister for Health and many of those on the other side think that this is just a small amount of money for people. They do not realise that forking out extra money every time you go to the doctor—$7 plus $7 plus $5 dollars and so on—adds up. If you have a couple of children, it adds up even more, and the cost does eventually deter people from getting the health care they need. I find it quite strange that, when we are looking at ensuring that people have the medicines they need—and, indeed, at ensuring that they get the primary health care they need—the government seems to be pulling money away. What will be the consequence if we do not ensure that people are taking the essential medicines they need? What will be the consequence if they are not going and getting a check from their GP? They will end up in hospital—and we know that hospital care imposes higher costs on the taxpayer. So when the health minister comes in here and talks about sustainability of the healthcare sector, what he is really doing is lazy policy development. He is shoving a whole lot of costs onto consumers without doing any analysis of what will happen to the most expensive part of the healthcare sector—hospitals.

We hear day by day the rhetoric from the minister that our healthcare system is not sustainable. It is just not true. Our universal healthcare system is the envy of the world, and the costs are kept in check. The PBS has ensured that many people can get the medicines that they need. That is not to say that we do not need to look continually at our system and make sure that it continues to be efficient, but shoving costs onto patients in the community will not somehow make the system more effective. It might cost the government a little bit less in the short run—because people will not go to the doctor when they are sick and they will not get the medicines that they need—but those costs will come out somewhere else, and that will be in our emergency departments.

These changes are part of an ideological campaign to get rid of our universal healthcare system and create a two-tiered user-pays system. There has been criticism right across the world of two-tiered systems that do not ensure that people can get help when they need it. So it is strange that this government seems to be clamouring to ensure that we have a two-tiered user-pays system where if you can afford your healthcare costs then you can get the health care you need, but if you cannot afford them then you will not. Some of Australia's most senior doctors have already warned that changes in this budget will put Australia's healthcare system back 50 years.

The price increase comes off the back of the $80 billion in cuts to our public hospitals and schools. While moving costs onto ordinary Australians for their health care and ensuring they bear the brunt of these costs, the government is also cutting funding to our hospitals. In South Australia the cuts equate to about $655 million—equivalent to the cost of running Flinders Medical Centre. Flinders Medical Centre is one of the important hospitals in South Australia; it takes on many patients from my electorate. Without the amount of money being cut by the Commonwealth, that centre could not exist. Of course, the state government is ensuring that they continue to support Flinders hospital, but that is the size of the cuts that we are talking about.

We hear regularly the Minister for Health say that the PBS and MBS are the same. Of course, they are not the same. We pay a Medicare levy and high-income earners pay a Medicare levy surcharge. There are no such funding arrangements for the PBS. I think it is really important to note that this increase will have a significant impact on our most vulnerable. The government's argument that its intention is for the PBS to grow in a sustainable way is complete nonsense. If that was the case, they would be investing the money they save back into health. Of course, they are not doing this.

Labor did a lot of hard work when in government, especially when it came to the PBS. Accelerated price disclosure has slowed the real rate of the PBS growth and put the PBS on a sustainable footing. I remember distinctly that when Labor was making these difficult decisions those in the coalition were crying blue murder. They spoke out very much against price disclosure, saying, 'This is terrible. How dare you accelerate price disclosure?' While Labor was doing the hard yards in policy reform to make the PBS sustainable, the coalition were saying: 'Don't do it. That's not fair for pharmacists around the country. It shouldn’t happen.' What we are seeing now is the Liberal Party not only adopting those measures but also saying, 'That's not enough; we are going to move those costs onto patients.' That is very concerning.

When it comes to price disclosure, the package announced in 2007, running to 2017-18, will have savings of close to $20 billion. That is significant reform, and those are significant savings to ensure the PBS is sustainable. It would be nice to see this government do the hard policy yards, rather than just say to Australians: 'We can't be bothered looking at reform. We are just going to put the cost onto you. Here is $5 extra for your prescription, another $7 for the GP and then $7 for an X-ray.' It just keeps going on. As I have said many times, this will have a perverse impact on our health system. It will not result in savings. It might look better in that one budget item because fewer people are going to the GP, but of course the costs will come out in other areas.

It is important to note that this bill before the House is part of a pretty nasty budget that will hit people in the community. I held a seniors forum in my electorate last Friday. People are really concerned about this. The government seems so out of touch. The government seems to stop listening to people about their concerns. Even at our seniors forum, people were raising concerns about the changes to Newstart and about the issue of young people being cut off for six months. One gentleman said, 'That's all right; these young people can rob the doctor's surgery, because there will be plenty of money there.' That is the cynicism out there in the community about what these changes will mean and about how little this government cares about the cost of living for so many people. I think it is really important.

The bill proposes to increase the PBS safety net by 10 per cent plus CPI indexation on 1 January each year from 2015 to 2018. The government states that from 1 January 2019 only the CPI index will apply, but it is fair to be sceptical of the government's promise on that when it has broken every single promise when it comes to health care. I think that is an important point to make. The bill before us today is not something that reflects how the Australian people thought things would be before the election. If you had said to the Australian people before the election, 'Will the government slap a big new tax on your medicines?' people would have said: 'No. They have not said that in their blue book'—their blue book of 'real solutions'. 'Will they slap extra money on you when you go to see the GP?' Of course people would have said: 'No. It's not in their little blue book. They said they'll keep their promises.' When it comes to health funding and hospital funding, do you think that if you had asked the Australian people, 'Are they going to cut $50 billion out of hospitals?' they would have said: 'No. They said they wouldn't make any cuts to health.' That would be the response of the Australian a people. Of course, we now know that it is not true. Indeed, all the promises made to the Australian people were about not cutting funding and no new taxes. This bill is part of the many broken promises that were made to the Australian people before the election, so it is particularly concerning.

This bill proposes to increase the concessional PBS safety net by two prescriptions each year from 1 January 2015-18. This means that not only will medicines become more expensive for those who are at their most vulnerable—because that is what the safety net is there for; it is to protect Australians who are in very vulnerable situations—but the safety net will also be further and further away. This is another concern. It is another tricky item that the government has put into this bill.

This bill represents one of the many, many items in the budget that are unfair and tricky—things that the Australian people did not expect. They did not expect another broken promise. I think it is the case for many people—certainly for those I meet when I am out in my electorate—that they have just run out of fingers and toes on which to count the broken promises of this government. They add them up, and there are the cuts to education, the cuts to health, the cuts to family payments and the cuts to pensions—the list goes on and on and on. I would ask the government to reconsider this bill. I think it is a somewhat lazy and also unfair way of shifting the cost to ordinary Australians. This bill, along with so many other costs, such as the increase in the GP tax, will be a huge burden.

I have mentioned emergency departments on numerous occasions, and I have to say that it is disappointing that it is the federal who is advocating for a co-payment at emergency departments as well. This is their answer to stopping people from going there. If people cannot afford to go to a doctor or cannot afford to get their medicines and they turn up at emergency, it is a case of: let's charge them there as well. I am really proud that the South Australian government has ruled out charging co-payments at emergency departments. I would be very concerned if, as a result of that, this government made any more cuts. We know that today Joe Hockey has said that he would like to see more cuts on top of the ones that we have already got. I think we need to stand up—and this side of the parliament will stand up—for the Australian people when it comes to health in order to ensure that we have an affordable, accessible, universal healthcare system that does not mean that you get health care if you can afford it but, more importantly, that you get health care when you need it.

Andrew Giles (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

I rise in opposition to the National Health Amendment (Pharmaceutical Benefits) Bill 2014. I am particularly pleased to be following the member for Kingston and to have been in the chamber for what was a very effective contribution, like that of many opposition members in this debate. I think something that is striking in this debate and quite telling in terms of the policy and political implications of this debate is the unwillingness of government members to speak to this piece of legislation. We have heard some terrific contributions from a number of my Labor colleagues today, but government members have been unwilling to join in this debate. I think that is revealing, and I can well understand why they have chosen not to participate in this conversation.

I rise in opposition to the legislation, in opposition to another broken promise and in opposition to further cuts to health. I also rise to make a contribution in support of universal health care—a core Labor value and, I believe, a core Australian value. Earlier this year, I think in February, we celebrated the 30th birthday of Medicare. It is a wonderful achievement and one that I think is central to the very fabric of contemporary Australian society—certainly to a conception of Australian social democracy that we on this side of the House hold so dear. It is part of our social compact. The shadow minister, in her contribution to this debate, very effectively reflected on this in highlighting the PBS's role in ensuring that health and wealth are not synonymous and that everyone gets those medicines that they need, not those that they can afford.

In thinking about Medicare's 30th birthday, I am also struck, perhaps because I am also 40 years old, that it should have been—

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

You've had a hard life!

Andrew Giles (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

A very hard life and it is getting harder, Parliamentary Secretary, for me, but more importantly for many of the people that I represent and the people that the member for Calwell represents due to the changes and broken promises effected by this government. It should have been Medicare's 40th birthday this year. In 1973 the Whitlam government enacted Medicare and transformed access to health care for Australians. It should have been Medicare's 40th birthday and it would have been but for the actions of another conservative government. So whatever members opposite say about their great friendship with Medicare—the health minister and the Prime Minister himself, who was a former health minister—opposition to it and to universal health care is in their DNA. So it seems pretty clear to me that this bill is an expression of their ideology. Talk of sustainability of the PBS and of sustainability of our health system more generally is a very unconvincing fig leaf—or maybe it is just a shorthand for Americanising health care in Australia, walking away from universality by using weasel words.

The changes before us are part of a deeply ideological campaign to get rid of Australia's universal healthcare scheme and to create a two-tiered, user-pays system of health care in Australia. I am mindful, even if the minister is not, of the warnings from most of Australia's most senior doctors that the changes in this budget, of which these measures are only a part, will put back Australia's health system over 50 years, so again under this government we go back to the future; back to the imagined golden age of the Prime Minister's childhood; back to before Whitlam and back to before Medicare's first iteration. I wonder if this explains the health minister's apparent deep interest in matters of history—distant history, of course; he is not very interested in talking about his performance in the last parliament as a silent shadow minister. Perhaps if he had engaged more in the debate over that time we might have been better placed now, as this government considers how it will meet our health challenges.

The minister has a lot to say about the past. Apparently he has a deep interest in health debates under the Hawke government, more than 20 years ago, but he has very little to say about future challenges. As the shadow minister, the member for Kingston, just said, we see lazy policy from a lazy minister who was of course a lazy shadow minister. He seems to be entirely uninterested in facing up to the real challenges in his portfolio. There has been discussion on this side of the House about the challenges in preventative health, and all we have seen is this government—to be fair, they have been consistent with this—walking away from preventative health and pushing people into the expensive tertiary end of the spectrum. In the matter of public importance discussion yesterday, in the minister's 10-minute contribution I am not sure he spent two minutes talking about his portfolio. He was much more excited about showing his contempt for nurses and their representative organisation and discussing at some length his imagined view of how Labor Party preselections are conducted—matters a long way from the very serious matter of public importance before the House yesterday and the challenges we are discussing here today.

If the minister were interested in facing the sustainability challenge, that narrow element of challenge in his portfolio responsibilities, he would have come up with an alternative—the sort of alternative most of the academic contributors to this space have been talking about, like changes to pricing arrangements. Since 1948, some time before Medicare, the Chifley Labor government enacted the PBS and since then it has worked effectively to provide Australians with affordable access to necessary medicines, with the government subsidising those medicines to ensure access based on need. It meets health and economic imperatives. I note that earlier this month the OECD recognised that Australia's pharmaceutical spending as a percentage of health expenditure was below average.

This bill would increase the Pharmaceutical Benefits Scheme co-payments for general patients by $5 to $42.70 and by 80c to $6.90 for concessional patients from 1 January. next year—less than six months time. It also increases the concessional PBS safety net threshold by two prescriptions per year and the general safety net threshold by 10 per cent each year for the four years from 2015 to 2018. I note that there are changes to the Repatriation Pharmaceutical Benefits Scheme as well. These increases are in addition to the usual increases through CPI and indexation and will create many real budget emergencies for families in the Scullin electorate and right around the country.

In considering this bill I have had regard, as I am sure members opposite would have, to the work of the Parliamentary Joint Committee on Human Rights. It noted in its evaluation of the bill:

… the effect of the Bill will be to increase the cost of medications for all consumers, including those reliant on social security payments.

It went on to say that the proposed measures represent ‘a limitation on the right to health and/or a retrogressive measure which is not explicitly addressed in the statement of compatibility for the Bill.’ The committee went on to comment that it would expect a statement of compatibility to provide an economic assessment of the impact of the bill on individuals and their capacity to bear the additional up-front payments for medicines—a not unreasonable request, you might think. The committee has also requested the minister advise further as to the purpose of the proposed measures and whether they can be considered reasonable. I note that the minister is in the chamber, and I await his response.

I have also been mindful of the response of stakeholders. Unsurprisingly, the Pharmacy Guild of Australia has concerns. I note with greater interest, with all due respect to the Pharmacy Guild, the comments of the Consumers Health Forum, which has expressed its deep concern over growing out-of-pocket costs. It strongly opposes these changes, looking to some significant American research indicating that where there is a co-payment people could be four to five times more likely not to have prescriptions filled than when there is no co-payment. These concerns are also echoed by the Public Health Association of Australia, and Michael Moore, the CEO of that organisation, has stated that the measures are inequitable and would affect society's most vulnerable members. He goes on to argue that the people to whom this is most important are the vulnerable, such as Aboriginals and Torres Strait Islanders, people from low socioeconomic backgrounds or from non-English-speaking backgrounds, and the elderly. These very significant concerns should be considered seriously in this place and in the other place should the bill proceed from here.

I note that the bill is expected to raise $1.3 billion over the forward estimates, and that this would be contributed to the government's much vaunted Medical Research Future Fund. The purpose to which these moneys are to be attributed is an important aspect of this debate. It seems to be a reverse hypothecation and it bells the cat on the claims of system sustainability justifying these changes. If it were really about sustainability of the health system, the revenue would be going back into funding health care today and not looking to the sick today to fund future research.

As the member for Kingston and other speakers on the Labor side have noted, Labor made changes to the PBS in government that put it on a sustainable footing. The changes before us are an unnecessary impost on Australians struggling to make ends meet due in large part to other budgetary decisions of this government. Labor's approach looked to the evidence—it looked to proper consultation and had regard to stakeholders, unlike the approach of this government and this minister. These changes will have a real impact on people's lives—unfilled prescriptions on top of doctors visits deferred due to the GP tax.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour and the member for Scullin will have leave to continue his remarks when the debate is resumed.