Senate debates

Thursday, 17 October 2019


Medical and Midwife Indemnity Legislation Amendment Bill 2019, National Health Amendment (Safety Net Thresholds) Bill 2019, New Skilled Regional Visas (Consequential Amendments) Bill 2019, Social Services Legislation Amendment (Drug Testing Trial) Bill 2019; Second Reading

5:55 pm

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Minister for Families and Social Services) Share this | | Hansard source

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated into Hansard.

Leave granted.

The speeches read as follows—



The Medical and Midwife Indemnity Legislation Amendment Bill 2019 amends the Medical Indemnity Act 2002 and related legislation to streamline the legislation underpinning the Government's support for medical indemnity insurance. This Bill provides certainty to insurers and practitioners of the Commonwealth's ongoing support for medical indemnity insurance, a level playing field for medical indemnity insurers and better protection for practitioners.

I introduce this Bill today with the support of the Australian Medical Association, the Royal Australian College of General Practitioners and medical indemnity insurers. This Bill is the culmination of a two year consultation process for improving existing arrangements. The Government thanks practitioner groups, industry representatives and medical indemnity insurers for their assistance in developing this Bill.

The improvements in this Bill take effect from 1 July 2020. The Government is introducing this Bill with ample time prior to effect so insurers have time to implement necessary changes to their operational requirements.

The Government has decided to subsidise the medical indemnity market to prevent market failure and stabilise the industry after Australia's largest medical indemnity provider, United Medical Protection, was placed in provisional liquidation in May 2002. At the time, there was uncertainty as to

The Government continues to fund seven professional indemnity schemes whether practitioners could access indemnity insurance, coinciding with an increase in claims costs and premiums. The Government's involvement has ensured a more disciplined approach to risk management for professional indemnity insurance and a reduced risk of failure from medical indemnity providers.

to enable privately practising doctors, health practitioners and midwives access affordable professional indemnity insurance.

The Government remains committed to guaranteeing that these schemes continue to operate. In the 2018-19 financial year alone, the Government provided $83 million in support of practitioners and to the continual operation of these schemes.

The Government currently funds the following schemes:

1. The Premium Support Scheme, which is there to help doctors whose medical indemnity costs exceed 7.5% of their gross private medical income. Around 1,000 medical practitioners currently participate in the PSS.

2. The High Cost Claims Scheme, which is designed to help medical indemnity insurers by funding 50% of the cost of medical indemnity insurance payouts between $500,000 and up to the limit of the doctor's cover (generally $20 million).

3. The Run-off Cover Scheme, which provides free run-off cover for eligible doctors who retire or leave the private medical workforce permanently. The Scheme covers the cost of claims against them.

4. The incurred-but-not-reported Scheme, which covers the costs of claims from the former United Medical Protection (UMP)'s (pre June 2002) unfunded incurred but not reported liabilities.

5. The Exceptional Claims Scheme, which provides protection for doctors against personal liability for claims that exceed their insurance cover limit of $20 million.

6. The Midwife Professional Indemnity (Commonwealth Contribution) Scheme which helps the contracted indemnity insurer provide affordable cover for eligible midwives. This is achieved by funding 80% of the costs of indemnity payouts over $100,000 and 100% of payouts over $2 million.

7. The Midwife Professional Indemnity Run-off Cover Scheme, which provides free run-off cover for eligible privately practising midwives who retire or leave the workforce permanently. The Scheme covers the cost of claims against them.

As a result of extensive consultation, a First Principles Review of the Government's support for medical indemnity was commissioned by the department and completed in April 2018. This Bill sets the legislative framework for implementation of the recommendations from the First Principles Review.

This Bill will create a level playing field for medical indemnity insurers. The Premium Support Subsidy Scheme is currently administered via contracts with four medical indemnity insurers. These contracts include the obligation for insurers to provide universal cover arrangements in specific jurisdictions. The effect of this is that universal cover for medical practitioners only applies to

four medical indemnity insurers. Schedule 5 of the Bill requires all medical indemnity insurers to provide universal cover to doctors. If an insurer chooses to provide medical indemnity insurance they must provide universal cover.

Following passage of the Bill, these contracts will cease on 1 July 2020 and the Premium Support Subsidy Scheme and universal cover obligations will be embedded in legislation to apply across the market. All insurers accessing the medical indemnity schemes will be subject to the same requirements, including the obligation to provide indemnity cover to any doctor who requires insurance.

By extending these arrangements to all participating insurers, the Government is ensuring that medical practitioners are protected and will be guaranteed medical indemnity insurance.

Universal cover protects doctors from being denied cover where the claims history relates to their speciality, location or patient cohort. It also reduces the risk posed by these individuals by increasing the risk loading which insurers can apply and enabling insurers to refuse cover in exceptional circumstances. Insurers will also be supported and given the flexibility to increase the risk loading based on the risk posed by a practitioner up to a 200 per cent cap of the standard premium price.

The Bill also makes a range of administrative improvements, including:

      a) addresses insurer concerns relating to aggregation of claims for eligibility for High Cost Claims payments;

      b) removes the 65 year age requirement to provide greater access to the Run-Off Cover Scheme (ROCS) for all practitioners that permanently retire; and

      c) provides certainty that medical and midwife indemnity claims will only relate to incidents that have occurred in connection with a health service.

            As part of these amendments, the Government has already invested in improving the Department of Human Services Information Technology systems. This will streamline application processes and reduce the administrative burden for insurers, moving away from manual claims processing to an automated and efficient online claims system for greater transparency. This investment will reduce re-submissions and manual handling of claims and improve the time it takes to assess claims and make payments.

            The Government will also respond to a recommendation by the Australian National Audit Office that improvements be made in the monitoring of the performance of the medical indemnity schemes. An actuarial evaluation on the

            stability and affordability of Australia's medical indemnity market will be commissioned, to be tabled in Parliament by 28 February 2021. This assessment is intended to provide confidence to Parliament and the general public that Government funded professional indemnity schemes remain relevant and are achieving their objectives.

            In Schedule 6 of the Bill, for the purpose of providing clarity in administration, the Government will be providing for a separate allied health practitioner high cost claims schemes. The allied health schemes will mirror the existing high cost claims and the exceptional claims schemes.

            Through these amendments, the Government will also be closing an anomalous gap in the medical indemnity schemes for which employed privately practising midwives are currently excluded. Until recently, a small number of employed privately practicing midwives were limited from accessing professional indemnity insurance and were unable to practice. The Bill will ensure claims against these midwives will be covered under the allied health schemes on the same basis as other medical and allied health practitioners.

            In 2018, the Government conducted a Thematic Review of the medical indemnity legislation. The review recommended amendments that would reduce duplication and complexity in the medical and midwife indemnity legislative instruments and, where possible, simplify and streamline the instruments. In response, the Government agreed to consolidate eight Commonwealth Acts and 14 legislative instruments. The amendments to the legislative instruments will be tabled in Parliament after passage of this Bill.

            In summary, these legislative reforms support the sustainability of the Government funded professional indemnity schemes, improve its operation, enable the discontinuation of discrete contracts between the Commonwealth and medical indemnity insurers, and reduces unnecessary regulatory burden for insurers and medical practitioners. The changes being made through the Bill will ensure that the medical and midwife indemnity legislation are fit for purpose over the long term. Patients will benefit from this proposal through a professional medical workforce that is adequately insured, creating a health care system in which access is not impacted.

            After introduction of the Bill, the Government will be continuing the collaborative approach in the drafting of regulations and rules that support the medical indemnity legislation. These instruments will consolidate and simplify the current legislative instruments. The Government will be consulting further with key stakeholders on the legislative instruments in October 2019 and looks forward to working with practitioner groups and insurers on the development of these instruments.



            The National Health Amendment (Safety Net Thresholds) Bill 2019 (the Bill) amends the National Health Act 1953 to implement the Morrison Government's election commitment to reduce the Safety Net thresholds that apply to the Pharmaceutical Benefits Scheme (PBS) medicines.

            The PBS has been providing affordable access to medicines for Australians for over sixty years and is rightly respected and valued for the high quality, cost-effective services it delivers.

            The Morrison Government is committed to supporting the PBS and the patients it serves. We have a deep commitment to list every new medicine recommended by the independent expert Pharmaceutical Benefits Advisory Committee.

            Since 2013 we have made more than 2100 new or amended medicines listings on the PBS through an additional investment of around $10.6 billion dollars.

            Through the PBS, patients can access medicines that in some cases would cost tens or even hundreds of thousands of dollar per year for a maximum of $6.50 per script for concession card holders, or a maximum of $40.30 for non-concessional patients. Patients receive free or reduced cost scripts once the reach their safety net.

            Ninety one percent of PBS scripts each year (186 million) are dispensed to concession card holders, including pensioners and low income earners, meaning they pay no more than $6.50 per script for medicines that without subsidy would cost much more than that. Twenty percent of concession

            The Bill scripts (37 million scripts) are free of charge because patients have reached their safety net.

            This Bill proposes amendments which will reduce the PBS Safety Net threshold amounts from 1 January 2020 for all Australian who use the PBS. This will enable PBS patients to reach the Safety Net earlier in the calendar year and provide them earlier access to free or reduced cost PBS medicines.

            Specifically, the Safety Net threshold for concessional patients will be reduced from 60 PBS concessional co-payments to 48 PBS concessional co-payments. This will reduce the concessional Safety Net threshold to an estimated $316.80 in 2020. Without this proposal, the 2020 concessional safety net threshold would have risen to an estimated $396.00.

            The Safety Net threshold for general patients will reduce from the 2019 level of $1550.70 to $1,486.80. Without this proposal, the 2020 general safety net threshold would have risen to $1586.40.

            These changes will benefit approximately 1.6 million concessional patients and 129,000 general patients, allowing them to reach the PBS Safety Net sooner and reduce their out of pocket health costs by $80 per year for the majority of patients.

            This will be particularly helpful for Australian's whose treatment requires a larger number of PBS prescription medicines every year. For example patients with chronic conditions such as heart disease, high cholesterol, arthritis, asthma, diabetes and cancer.

            In particular it will assist more vulnerable Australians, such as those with a Pensioner Concession Card, Australian Seniors Health Card or a Health Care Card. It will also provide benefit for gold, white and orange card holders under the Repatriation Pharmaceutical Benefits Scheme.


            The Morrison Government's commitment to the PBS is rock solid. Together with Medicare, it is a foundation of our world-class health care system.

            The changes proposed in this Bill will further improve affordability of PBS medicines and I am confident they will be welcomed by all Australians.

            The aim of this Government is to ensure that Australians have timely access to affordable medicines. This Bill and these changes will directly benefit the people who most need access to medically necessary, and often lifesaving, prescription medicines.

            Our Government has a commitment to list all medicines on the PBS when recommended to do so by the medical experts.

            We will continue to list all new medicines on the PBS, this is in contrast to Labor, who in 2011 stopped listing medicines because they could not manage the economy.

            Changes to the PBS safety net were a fundamental to our commitment to the Australian people at the recent election.

            Due to our strong economic management we are able to make these changes, reducing the out of pocket costs for patients who access the medicines they need through the PBS.




            The New Skilled Regional Visas (Consequential Amendments) Bill 2019 (the Bill) makes consequential amendments to legislation administered by the Department of Social Services, the Department of Education and the Attorney-General's Department. Specifically, the Bill amends:

              A New Tax System (Family Assistance) Act 1999
              Disability Services Act 1986
              Fair Entitlements Guarantee Act 2012
              National Disability Insurance Scheme Act 2013
              Paid Parental Leave Act 2010

            The Bill will give effect to government policy that holders of new provisional skilled regional visas, which come into effect on 16 November 2019, will have access to government services consistent with skilled permanent visa holders.

            The new provisional skilled regional visas are set out in the Migration Amendment (New Skilled Regional Visas) Regulations 2019.

            They are:

                These new visas are part of the Australian Government's plan for Australia's future population to ease the pressure on the big capitals while supporting the growth of those smaller cities and regions that want more people. The plan includes reducing the annual migration ceiling from 190,000 to 160,000 places and setting aside 23,000 places for these new regional visas.

                The visas, introduced by regulations tabled in Parliament on

                2 July 2019, support businesses in regional Australia to get the skills they need quickly.

                A key feature of the new visas is a requirement for regional migrants to live and work in a regional area for three years before being eligible for permanent residence.

                This will encourage visa holders to remain in regional Australia, which in turn will support the local communities and enhance population growth and economies of regional parts of the country.

                The amendments in this Bill will ensure that holders of the new visas have access to government services in line with the current arrangements applicable to permanent residence visas.

                These changes will have a low financial impact - while ensuring that provisional skilled regional visa holders are not disadvantaged compared to holders of permanent skilled visas available for people to work in metropolitan areas.

                Changes to legislation, service delivery and ICT systems - administered by the Department of Social Services, Services Australia (formerly the Department of Human Services), the Department of Education and the Attorney-General's Department - are required in order to give effect to the government's policy regarding holders of these new visas.

                This would be subject to meeting the same eligibility requirements for the payments and services, and serving the same applicable waiting periods as existing permanent skilled visa holders.

                These visa holders will be supporting local businesses and economies and contributing to rural and regional communities throughout Australia. I commend this Bill to the Chamber.



                Tackling drug and alcohol abuse among welfare recipients

                This Bill will establish a two year trial of drug testing for 5,000 new recipients of Newstart Allowance and Youth Allowance (other). This Bill demonstrates the Government's commitment to breaking down barriers that prevent people from getting a job.

                Data shows us that substance abuse is directly impacting the ability of some job seekers to undertake job search or other activities to get them into work:

                In the 2018-19 financial year, there were 5,247 occasions when a job seeker attempted to use drug or alcohol dependency as a reason for not meeting their mutual obligation requirements.

                In addition, between 1 January 2018 and 31 July 2019, a total of 8,638 job seekers participated in a drug or alcohol treatment activity as part of their mutual obligation requirements.

                The community has a right to expect that taxpayer-funded welfare payments are not being used to fund drug and alcohol addiction and that job seekers do all that they can to find a job, including addressing any barriers they have which prevent them from doing so.

                The welfare system is designed to provide a safety net for those who find themselves out of work or unable to participate in the workforce – not to help perpetuate people's drug habits.

                The Australian Institute of Health and Welfare's 2016 National Drug Strategy Household Survey shows that those who were unemployed were three times more likely to have recently used drugs such as ice and other amphetamines than those who were employed. For too long not enough has been done to try and deal with the real connection between drug abuse and unemployment.

                While there are some existing mechanisms in place for identifying job seekers with substance abuse issues and assisting them to seek treatment, the data clearly shows that more needs to be done to help these people overcome their substance abuse and get into work.

                The trial established by this Bill will assess the use of drug testing as a means of identifying job seekers with substance abuse issues that may be preventing them from finding a job, and supporting them to address these barriers through interventions such as Income Management and referral to appropriate treatment.

                Importantly, the drug testing trial is complemented by the Government's other substance misuse measures that commenced in 2018. This includes ensuring that all job seekers are able to undertake drug or alcohol treatment as an approved activity in their Job Plan. Since the commencement of that measure on 1 January 2018, 5,047 Stream A and B job seekers have participated in a drug or alcohol treatment activity as part of their Job Plan.

                Other measures to ensure job seekers with drug or alcohol abuse issues remain connected to their employment services provider were passed in the Social Services Legislation Amendment (Welfare Reform) Act 2018. Measures include removing exemptions from mutual obligations due to drug and alcohol use, and tightening the use of drug and alcohol issues as a reasonable excuse for not meeting obligations.

                Together, these measures recognise that supporting job seekers to address their substance abuse issues through appropriate treatment is a crucial first step on the path to employment.

                Supporting job seekers to take action to overcome their substance abuse will improve their chances of finding a job. This will benefit not just the job seekers themselves but also their families, the wider community and the economy.

                The trial will operate in three locations: Canterbury-Bankstown in New South Wales; Logan in Queensland; and Mandurah in Western Australia.

                Trial sites were chosen based on careful consideration of the available evidence and data, including:

                          This is not about stigmatising communities. The choice of sites wasn't about the highest levels of drug use in Australia. For the trial to be robust and successful, the Government identified locations with varying profiles and sufficient support services.

                          The Government has announced a dedicated treatment fund of up to $10 million to support job seekers in the drug testing trial across all three locations.

                          The Government has listened to feedback from the drug and alcohol treatment sector and will establish this fund to provide for additional treatment support in the trial locations where the existing state or Commonwealth services and supports are not sufficient to meet additional demand as a result of the trial.

                          This is in addition to more than $780 million the Government has already committed over four years from July 2018 to reduce the impact of drug and alcohol abuse on individuals, families and communities. This includes funding to support the National Ice Action Strategy to tackle the scourge of ice, especially in regional Australia.

                          Drug testing will coincide with Services Australia appointments and will be conducted in private by a qualified representative from a contracted third party drug testing provider. Depending on what kind of test people have been selected for, the test will either take place at a local Services Australia office or at a nearby facility.

                          Comprehensive rules will be set out in a legislative instrument relating to any additional illicit drugs tested for and the protocols for conducting the drug tests, including safeguards to ensure that testing is conducted appropriately and in accordance with relevant standards.

                          This legislative instrument will provide the flexibility to ensure that expert advice from the contracted testing provider and the drug and alcohol sector can be taken into account in developing these protocols and safeguards.

                          An exposure draft of the Drug Test Rules was tabled at the Senate Community Affairs and Legislation Committee's public hearing into the Welfare Reform Bill on 30 August 2017.

                          There will be appropriate consequences for people who deliberately miss an appointment without a reasonable excuse or refuse a drug test in order to avoid a possible positive result. If a job seeker refuses to take a drug test, having acknowledged that they may be required to do so as part of their condition of payment, their payment will be cancelled and they will not be able to re-apply for a four week period.

                          Job seekers who test positive to a drug test will have their payments placed on Income Management. This is designed to restrict their access to cash and limit their ability to use their payments to fund further harmful drug use, while not reducing the amount of payment they receive.

                          In this way, 80 per cent of a job seeker's normal payment will be quarantined to pay bills and purchase goods and the remaining 20 per cent will be paid into their regular bank account, accessible as cash to pay for discretionary items.

                          Job seekers who test positive will also be subject to a second drug test within 25 working days and may also be subject to further subsequent tests. This will help to identify those for whom drug abuse is an ongoing problem that may require treatment.

                          Job seekers who test positive to more than one drug test during the trial will be referred to a Services Australia contracted medical professional with experience in drug and alcohol treatment who will assess their particular circumstances and identify appropriate treatment or support options.

                          If the report from the medical professional recommends treatment, the job seeker will be required to participate in one or more treatment activities to address their substance abuse as part of their Job Plan. This could include activities such as rehabilitation or counselling.

                          This trial is not about penalising job seekers with drug abuse issues. It is about finding new and better ways of supporting job seekers with drug abuse issues to overcome barriers to work.

                          While drug testing is currently used in Australia by some employers and has also been used overseas in relation to welfare recipients, there is little comparable evidence available to tell us whether this sort of intervention would be effective in the Australian welfare context.

                          That is why this measure has been specifically designed as a trial – so we can assess the value of drug testing job seekers as a way of identifying those for whom drug abuse might be a barrier to work and supporting them to undertake treatment.

                          There will be a comprehensive evaluation of the trial to determine which aspects have been successful in addressing welfare recipients' substance abuse and barriers to employment.


                          The drug testing trial will test an innovative method of assisting people with drug abuse issues.

                          The Government considers it critical to do all we can to help vulnerable job seekers to address their barriers to employment so they can get and keep a job.

                          Debate adjourned.

                          Ordered that the bills be listed on the Notice Paper as separate orders of the day.