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HANSARD EXTRACT

National Health Amendment (Budget Measures-Pharmaceutical Benefits Safety Net) Bill 2005: Second Reading

13 October 2005

Mr HAYES (Werriwa) (1.18 p.m.)—The lengths to which this government will go now that it controls both houses of this parliament almost know no bounds. This government continues to amaze me when it comes to the extent to which it is prepared to wield its new-found powers as it continues to hack away at some of the fundamentals of our society. I oppose the National Health Amendment (Budget Measures—Pharmaceutical Benefits Safety Net) Bill 2005. I do not want to see it simply amended or watered down; I simply do not want to see it passed. This bill represents the extent of meanness of this government. It is yet another example of the obsession with implementing two-tiered systems when it comes to government services.

The Howard government’s great social engineering experiment that we have seen thus far includes the introduction of a two-tiered system in health; a two-tiered system in education and training; this morning, a two-tiered system in student services; and a two-tiered system in industrial relations, which is currently emerging. Now the government wants to apply it to pharmaceuticals. But, of course, that is really not going far enough. Given half a chance, this government acts to exacerbate disadvantage by introducing charges like those we have before us today. This is probably the perfect time for the government to slip through these changes, which it was too scared to take to the electorate at the time of the last election a little over 12 months ago. It is the perfect time to slip through changes to the PBS under the guise of sustainability and under cover of a $100 million advertising campaign on its extreme industrial relations agenda.

Members opposite may be wondering why I and my colleagues on the Labor side are upset about this bill. They might be wondering why we regard this as being of such importance. The reason is quite simple. These changes go to the core of people’s wellbeing. By and large, they have the most impact on those who can least afford it, and they impact on families. No-one wants to get sick, but when they do they want to know that they can have access to affordable and high-quality health and that they can obtain, at a reasonable price, the medicines they need to get back to good health.

Under the changes in the bill being debated today, the simple desire to get better and to be well again now comes at a higher price. Of course, this will not come about just through one price but through a complex set of rules put in place to shift the cost of health care from government to consumers. I am sure the government is pleased that it did not have to pass a no-disadvantage test on this to contend with the development of this piece of policy, because the solution would certainly not have stacked up. I have to wonder whether the minister has produced a family impact statement, one that is satisfactory to Senator Fielding, because this legislation certainly does impact on families.

This bill will introduce a complex set of rules, possibly the bluntest instrument available to the government, which it claims will support the affordability of the Pharmaceutical Benefits Scheme well into the future. But this bill and the policy it introduces do nothing to support the affordability or the sustainability of the PBS. This bill simply shifts the costs off the government books and into the pockets of sick people and families. The bill claims to support sustainability of the PBS by doing two things: firstly, it sets in place a new safety net and new patient copayment arrangements; and, secondly, it introduces a threshold for eligibility for the safety net entitlements. This is where a new 20-day rule comes in. The bill before us introduces a 20-day rule aimed at stopping the accumulation of medicines and the filling of scripts in order to reach the safety net expenditure threshold early.

While not wanting to make light of issues of health or the PBS, I do find the government’s underlying agenda in this scheme somewhat amusing. As we have heard from previous speakers, a 20-day rule implements a time limit for filling a script. Under the 20-day rule, a resupply within 20 days of a previous supply of the same pharmaceuticals for the same person will not count towards the calculation of the safety net entitlement. The copayment will not accrue towards the safety net threshold.

The stated aim of this part of the bill is to discourage people from obtaining additional or early supplies to reduce the risk of wastage—or at least that is what it seems to be. It points to a clear concern of the government that people are either seeking to fill additional scripts and hiding medicines away in the cupboard or simply seeking to gain their medicines early. I must admit that I do not know the extent of this problem—or even if it is a real problem—but it seems to me that people who are engaging in that sort of behaviour are doing so because of flaws in the existing system. These people are almost being accused of being rational agents because they know that once they reach a certain level of copayments the cost of their pharmaceuticals will be reduced—or at least that seems to be the government’s argument.

It would seem to me that the motivating factor in this is not the desire to have more pharmaceuticals; it is the desire to reach the threshold. The threshold has created a perverse incentive for consumers, and I have to wonder whether setting some form of arbitrary time frame in which the same pharmaceuticals cannot be purchased would be the best way of addressing this problem—if indeed it is a problem. I find it particularly interesting that the immediate supply provisions that allow for subsidised resupply in the case of loss or destruction will also be subject to the 20-day rule, and those intending to travel will not receive any exemption. One can only wonder what sorts of abuses of the PBS travellers have been perpetrating to have this rule applied to them.

The most significant of the two changes, when it comes to the concerns of the young families in my electorate, are the changes to the threshold for the safety net entitlements. This will result in a double whammy for patients. The changes contained in this bill do not introduce just one increase but set in train a series of increases in the threshold for each and every year, right through to 2009. Members opposite may scoff and say that this is not a big deal, that there are only four increases in the threshold. I wish it were that simple.

This bill implements increases in the threshold by an amount equal to two indexed general patient copayments in each of these years. This means that the current general safety net level of $874.90 will gradually increase to a level in 2009 that is the equivalent of eight additional copayments over its current level. As the previous speaker, the member for Scullin, said, the position with concession card holders is also not spared in this instance. The concessional safety net has also been caught up in this legislation. Over the next four years the concessional rate will rise from its current level of $239.20—or the equivalent of 52 copayments—to a level equivalent to 60 copayments in 2009.

While most would think that the introduction of a new system of increasing the safety net would supersede the existing one, the government has decided to stick with its own two-tiered philosophy here as well. Currently the safety net increases are on 1 January each year and increase at the rate of inflation, as measured by the CPI, and the government has made it clear that this situation will continue. So what Australians will face when they wake up on New Year’s Day of each year from next year through to 2009—in addition to any possible after-effects of the celebrations of the night before—will be an increase in the PBS safety net threshold. Let us be perfectly clear on what will happen. There will be an increase in the safety net well above the rate of inflation. The threshold will not simply be adjusted to indexation; there will be an out-and-out increase. We will have a two-tiered increment in the safety net to match the two-tiered PBS.

The government claim that these changes are necessary to ensure the ongoing sustainability of the PBS. They argue that incremental changes are necessary because they will limit the alleged rorting of the existing scheme through the advance purchase of medications and the hoarding of medications, all done so that people can reach the safety net level of expenditure. If that really is the case, I find this is a pretty strange policy solution. It is a strange policy solution that did not make its way into the coalition’s policy material released during the last election campaign. It is a policy solution that only came to light as a measure in this year’s budget.

The way that this bill and its measures are introduced will produce the desired effect, because they will stop people from using medicine. Health care costs are already one of the single biggest threshold budget items for Australian families, and this policy is going to make those costs bigger. This cost-shifting exercise will mean that, more than ever, people will be thinking twice about going to the doctor or taking their kids to the doctor. Initially it was about whether or not they could find a bulk-billing doctor; now it will be about whether they can afford to have the script filled. The people who will find themselves at the greatest disadvantage when it comes to accessing medicines under this scheme are those already doing it tough under this government. The people who are facing considerable cuts to their welfare payments under the government’s draconian welfare-to-work reforms are facing yet another setback.

Families in my electorate are already doing it tough and this change means that things are going to get worse for them. The people of Werriwa are already facing significant increases in the price of petrol, which this government has refused to do anything about. Many families in my electorate are also suffering at the hands of the family tax benefit system and have to repay almost $1.5 million because of that flawed system. This is on top of already high mortgage repayments which, if the indications of the Reserve Bank as reported two nights ago are anything to go by, may go even higher. Now, when the family budget is already stretched to breaking point, they have to deal with this—policies that do nothing to lift the pressure that families and family budgets are currently under.

The instruments employed here are probably the bluntest that could have been employed by the government. Generally speaking, those who can least afford the copayments will be most affected by this change, and they are often those in society who, on average, have the highest propensity to suffer an illness. Higher copayments will cut down the use of pharmaceuticals, but it is also likely to mean that those groups who need access to pharmaceuticals will no longer be able to afford them. This is another mean act from a mean government. This bill introduces another system where those who can afford access will get access and those who cannot afford it will be deprived.

This bill has nothing to do with the sustainability of the PBS; it is about the sustainability of the government’s budget position. After the government splashed around cash during the last campaign in an effort to secure victory, it has realised that, in order to maintain its budget position, it is necessary to cut costs elsewhere. It is necessary to shift costs from the government books and foist them on the broader populace. Put simply, Labor does not believe in a two-tiered health system. It does not believe that, in order to fix a system, it needs to remove access to the system from those least able to afford it.

The price mechanism is a powerful tool which—I have to concede—can produce positive results. By the same token, price is also a powerful tool for producing vastly inferior outcomes if it is used wrongly. The changes implemented by this bill are a fine example of that. Labor believes that the PBS is an investment in the health of all Australians. It should not be abused; it should be used wisely and it should be financially sustainable. With this bill the government has signalled that it is determined to continue to remove access to affordable health care. It has done this by introducing a scheme that will produce not one, not two, not even three, but in effect 12 increases in the safety net threshold for the PBS over the next four years.

The passage of this bill will not make the PBS any more sustainable, it will not fix the growing hole in the budget and it will not introduce any further incentives for new medicines to be listed on the PBS. Access to the high-quality medical care that we have available in Australia should not be rationed simply on the basis of the ability to pay. We have all heard stories from people who continue to feel as though they have been ripped off by private health insurers as the minister continues to rubber stamp increases in their premiums, and now they are going to face this.

This bill is a manifestation in legislation of an out-of-touch government that—because their fourth term agenda only extends as far as destroying the rights of working Australians—is bereft of ideas and is trying to paper over cracks that it has already created for itself through the high-tax, high-spending regime that it has presided over for the last decade. The Parliamentary Secretary to the Minister for Health and Ageing, when he introduced this bill, crowed:

The safety net will continue to play an important role in protecting people from high out-of-pocket costs for PBS medicines.

Surely this cannot be believed with regard to the structure of this piece of legislation. I oppose this bill and I oppose everything that this government has done to destroy a health system that once provided safety and security for all Australians, comfortable in the knowledge that if they happened to get sick they could seek and find help through an affordable and equitable system.

 

 

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